Fair Trading Amendment Bill

Point of order. I seek leave for this Fair Trading Amendment Bill to be referred back to the select committee for it to deliberate, produce a report, and forward it to the House.

ASSISTANT SPEAKER (Hon Jacqui Dean): I’ll just take some advice on that. [Pause in proceedings] Leave is sought for that purpose. All those in favour say Aye. There is objection. I call the Hon Todd McClay.

A travesty of justice right there and of democracy. You see, the problem is—and I have an email here that says the following—“The Fair Trading Amendment Bill has been discharged from the Economic Development, Science and Innovation Committee. This is because, although the original schedule for the dissolution of Parliament meant that the bill would be eligible for reinstatement in the 53rd Parliament, the postponement has meant the report-back date of 12 August has now passed.”

This is a piece of legislation that is important. The Government members will stand up in a moment, as the Minister did a few weeks ago, and talk about protecting consumers. They won’t talk about getting the balance right so that those businesses that this legislation should focus on are targeted and affected. They will talk about the things that mean that businesses in New Zealand that function properly, that are running their businesses well and are caring for consumers, will be impacted and there will be a cost upon them. And what we will see from the Minister, I believe, is a significant number of Supplementary Order Papers (SOPs) of amendments to the legislation because the committee was not allowed to finish its work.

Now, I know the Government is in a rush to get things through. That’s why lots of pieces of legislation have come to the House and been rushed through in urgency in a day or two when there was absolutely no urgency at all. But a question to members opposite and to the Minister is: why will he not allow the select committee, or why will Government members not allow the select committee, to do its job properly, to improve the legislation and get it right, if this is so very, very important?

Now, there could be a reason, and that reason could well be because the Government wants to get this into law so very quickly. But we have now had six months since the election, six months of House time where the committee could have done its job. The committee could have done its job and finished hearing submissions and deliberated and talked to officials and got it right and produced a report, perhaps with amendments—some of the SOPs the Minister will dump in the House so that submitters and members of the public and others won’t have a chance to consider and inform us on. And this, again, therefore, I suppose, will be rushed through. That’s just not good enough, because there isn’t urgency with this. We’ve had six months. It could go back to the committee for just a month to finish the work that would have been done if the last committee, and the chair of the last committee, had been able to get it back, but that hasn’t happened.

Herein lies the problem, because we are going to see significant SOPs. That means the Government knows the legislation as it stands is not going to do the job it needs, or it’s changed its mind, or actually a significant number of submitters from the business sector have been engaged with the Minister, meeting in his office, or going to the Ministry of Business, Innovation and Employment, and the Government realises that, actually, in its current state, it will not do what it wants and it will burden businesses in a way that it shouldn’t, create costs that inevitably will be passed on to consumers. Because, inevitably, every time this Government comes up with a bright idea and they don’t allow a committee to do its job properly, it means costs upon businesses that end up being passed on to consumers. And that’s just not good enough, because this is a Minister who, in essence, hasn’t got this legislation right. He won’t allow it to go back to the committee; so he hasn’t got that right. He’s going to dump significant SOPs on the Table, which means so far that it has not been right. And when I saw him earlier, he hasn’t even got his hair cut right! This is quite important, and the reason for that is it’s going to make significant changes.

National supports sensible, transparent, straight-forward regulation that prevents the exploitation of consumers. This legislation doesn’t do that. It’s going to create significant burden upon some businesses where it doesn’t intend to, that’ll make it harder for consumers and will pass on frustration and cost. We don’t support imposing the poorly crafted or ill-defined regulation that is in this bill. I hope, when the Minister comes here and dumps a huge number, a large number, of SOPs, that actually they fix some of these things. But who would know? Because the experts haven’t been able to advise the House, because there isn’t a report from a committee—and I’m not meaning the members of the committee; the experts. We’re the ones that take advice, hear from the public, hear from businesses, and get to question the Minister’s officials to make sure that he is not captured by them. I don’t believe he is, but I can’t see the reason why he won’t allow this to go back to the committee.

You know, one of the biggest challenges with the legislation is that it fails to specify which behaviours would constitute unconscionable conduct. He mentioned this in his speech two weeks ago; this is what the bill is trying to achieve. But by not actually defining “unconscionable conduct”, what it does is create uncertainty. Businesses won’t know. There will need to be regulation. Whenever there is uncertainty, there is cost. So this isn’t about deciding that there shouldn’t be legislation; it’s that the Government and the Minister haven’t done their job properly.

Much of what the Minister has said he’s trying to achieve is already covered by legislation that’s gone through this House, the majority of which was when National was in Government. You see, we did a number of things that would ensure that consumers were protected, and, sadly, some of what this Minister is doing he says will protect consumers more but indeed it won’t. What it will do is merely make them feel better but won’t provide any additional support to them.

As an example, the Minister said it strengthens the ability for consumers to dismiss or prevent door-to-door salesmen from entering their property. They already have the ability to do that under existing law when it comes to consumer rights, and equally around anybody that comes on to your property if you do not want them there. So I don’t know what extra ability this gives consumers they don’t already have, but if the Minister had waited or asked for a report from the committee, he might have known that the committee looked at that in some detail. National will not be supporting this legislation, not because we don’t support consumers—we do—but this legislation won’t achieve what the Minister wants. It won’t protect consumers more. It is window dressing.

There is one very important point in it, though, that actually needs to be looked at, and if the Minister doesn’t have an SOP drafted on this, he must, because it actually is going to be of great challenge. One of the things he said in the legislation is that it’s not to focus on smaller businesses, and he’s defined this by way of contract. But one of the challenges that he has is looking at the value of smaller contracts. If you look at the insurance industry, actually there can be a contract for underwriting insurance companies which is a very large amount that has no impact on the consumer, because actually it’s not the value in the same way as it would be if somebody purchases something from somebody else. It is just a contract in the case there would be a problem, and the entire insurance industry will have to go and have a look at what it is they’re doing, and they’re considering what the rules are and how this will affect them. There will be great uncertainty, which adds to cost.

More than that, though, I understand the same Minister has another piece of work around reform of the insurance industry, because there is legislation there that certainly needs updating; there is no question on this. So why is he putting his toe in the water to have a little crack at the insurance companies here, which will create uncertainty, won’t provide any more support or protection for the consumer, and as soon as this is through later on come back and actually do the whole insurance industry? It is because the Minister isn’t in charge of this portfolio. He’s not focusing on the things that are important, and what he is not doing is thinking about legislation that actually will have the effect intended, as opposed to just window dressing that creates cost through regulation and uncertainty on business. Because every time you do that for a business, large or small, someone has to pay, and sadly it’s always the consumer, the very man, the very woman that this Minister says he is trying to help and protect with this legislation. We won’t be supporting it in its current form.

Delighted to take a call on the second reading of the Fair Trading Amendment Bill as the chair of a very, very busy select committee. And just to acknowledge the previous speech, there is a Supplementary Order Paper coming from the Minister. And to acknowledge what the previous speaker, Hon Todd McClay, said about the Minister’s haircut, the Minister has a very nice haircut and also a very cost-effective haircut as well.

This Government is committed to protecting New Zealand businesses and working closely with New Zealand businesses; that’s what we’ve done over the past four years and that’s what we will continue to do—and protecting consumers from unfair commercial practices. So what I’ll do is I’m just going to outline a little bit around what the bill does and maybe just use a few sort of anecdotes around that. Then, particularly, I wanted to focus in on the aspect around empowering consumers to direct uninvited sellers to not enter property. This bill addresses business behaviour that goes beyond what is commercially necessary—where the little guys have been taken advantage of and consumers are suffering.

At times there is a power imbalance within the business world. Over 90 percent of businesses in New Zealand are small businesses—less than 20 employees—and at times those small businesses enter into negotiations with much larger businesses and there is a power imbalance. So what this bill does is, basically, builds on previous work that has been done to ensure that there’s good faith discussions going on and the best outcomes for New Zealand consumers and the best outcomes for all businesses in New Zealand.

The bill introduces three key changes. The first one is it prohibits unconscionable conduct in trade; secondly, it extends protections against unfair contract terms to business contracts under $250,000 a year; and, thirdly, it empowers consumers to tell uninvited sellers—whether that includes MPs, we’ll maybe find out in the committee stage—to leave their property, including through the use of a “do not knock” sticker on the door.

So the reason we’re making these changes is because there have been many stories of small businesses who have been bullied by suppliers or by business customers. I just want to give a bit of context around this and a few examples. So one example that we’ve seen, actually, is businesses waiting a long time to be paid for their invoices. Now, the challenges for this are obvious in terms of cash flow. If someone is leading a small business, then the cash flow challenges can be exacerbated because there’s obviously less money within a small business than in a large business. The large businesses can, basically, bully the small businesses by not paying the invoices on time.

A second example is businesses having contract terms changed without their knowledge or consent. Now, this is obviously unfair. One of the fundamental philosophies that we have here in New Zealand—and all New Zealanders subscribe to this—is the aspect around fairness. We believe in a fair society where everyone should have an equal opportunity and an equal right to operate in our society. In this context we’re talking about business and we’re talking about fairness within business.

And the third example that we have seen in terms of bullying is businesses being pushed into unfavourable contracts due to a lack of bargaining power or alternatives. And that basically goes to what I was saying before about the power imbalance. The power imbalance does exist—we have to be real around that in terms of we have a diverse range of businesses in New Zealand. And it’s really great that we do, but the reality is we’re always going to have some small businesses, some medium, and some large. Like I said before, the majority of our businesses are actually small businesses here in New Zealand.

Businesses can experience stress, interruption, reduced profitability, and are unable to focus on growth, and we want our businesses to focus on growth. We want our businesses to have the ability to invest—the ability to borrow and to invest capital. But more than that, we want our business owners to be able to lift their heads up and to be able to be visionary. We’ve seen a number of visionary businesses here in New Zealand, and more and more are coming online each day in a whole range of areas. So we don’t want our business owners to be bogged down in these sorts of challenges, and particularly this bullying behaviour. If you look at bullying—I mean, if I think back to sort of my high school days—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Not me.

No, sorry, they’re my high school days, Madam Speaker—I appreciate that. The bullying generally happens when there is a larger person bullying a smaller person. That smaller person then often loses the will to either come to school or to operate, but, more importantly, to have a vision, and we want our small businesses to have vision, to have aspiration, and we’re supporting them to do that.

As the chair of the select committee, which, like I said, is a very busy and hard-working select committee, I’d like to thank all of the submitters who submitted on this bill. Now, as was previously raised, the submissions took place under the previous chair of the Economic Development, Science and Innovation Committee, Jonathan Young, so I’d like to thank Jonathan Young, who is no longer a member of this Parliament, for the excellent work that Jonathan Young did as the chair of this committee in terms of shepherding those submissions through, and there were other members on the committee as well.

The committee received 51 written submissions—so there was certainly some interest in this—and heard oral evidence from 20 submitters in hearings in Wellington and virtually over Zoom. Officials considered these submissions in the departmental report. Now, just to highlight some of the submissions that we heard: so we heard a number of submissions on the unconscionable conduct. Some submitters wanted a definition of “unconscionable conduct” to aid clarity. The list of factors in the bill provide a principle-based approach to help determine what conduct could fall foul of the law. There were a number of submissions on extending unfair contract terms to businesses. Submitters had mixed views on whether the unfair contract terms extension is appropriately targeted. The protections only apply to standards from contracts which aren’t subject to effective negotiation; this limit is for the protections to smaller and more vulnerable businesses who have poor bargaining power and don’t have the resources to identify unfair terms.

I’d like to move on to one other point, as I indicated at the start, which is the aspect of this bill around empowering consumers to direct uninvited sellers to not enter their property. So we currently have a situation—and I’m sure that many people who are either watching Parliament TV tonight or are listening at home have had this experience, whereby you are sitting at home, there’s a knock on the door, and somebody comes to sell you something at the door.

ASSISTANT SPEAKER (Hon Jacqui Dean): Me?

Oh, Madam Speaker, I apologise—to sell the people something at the door.

ASSISTANT SPEAKER (Hon Jacqui Dean): I don’t want to buy anything.

No, no, no. I was going to sell you some encyclopaedias, Madam Speaker! Ha, ha! A wonderful set of encyclopaedias! And look, in the 1980s and 1990s it really was. Encyclopaedias was sort of the cliché, and the reality is I know a number of people who have a large range of encyclopaedias in their house because of the sales pitch.

These days it can be a whole range of products, but there are many examples of somebody sitting in their house and receiving a knock on the door and somebody at the door trying to sell them something. And then that person then, basically, says to them, “Look, I’m not interested; I’m a little bit busy.”, but the salesperson can often be quite pushy, and it can create a really difficult environment, and pressure is put on consumers, and I’ve experienced that myself, and I know a lot of people have.

Sometimes these people can be, obviously, very well meaning, and sometimes they can actually be charities. The charities often subcontract someone to do the selling for them. But the reality is that there is an aspect of pressure that is often not welcome. Sometimes that pressure, like I said before, can come from members of Parliament. I know myself when I’ve knocked on doors previously and I’ve seen the sign “Do not knock” on the door. What does that mean for a member of Parliament? I’m not sure. Maybe someone else might have an opinion on that. I actually have been bitten twice on a doorstep by dogs, Madam Speaker, not by constituents, but I have been bitten twice by dogs—I didn’t learn the first time, but it is very important when someone does go to a door that they don’t put extra pressure on the person who opens the door.

I could tell a number of extra stories to illustrate what this bill does, but I see that my time is coming to an end so, unfortunately, I will not be able to tell any further stories about the door-knocking aspect. I wholeheartedly commend this bill to the House.

The time has come for me to leave the chair for the dinner break and the House will resume at 7 o’clock.

Sitting suspended from 5.59 p.m. to 7.00 p.m.

The House is resumed. When the House rose for the dinner break, we were commencing the second reading of the Fair Trading Amendment Bill, and the next call goes to National.

Thank you very much, Madam Speaker. The previous speaker, Jamie Strange, made a comment about the Economic Development, Science and Innovation Committee, saying how it was a hard-working select committee and that we worked really well, and I have to say that, actually, we do. However, the issue at hand is that the Fair Trading Amendment Bill, which is now currently before the House at its second reading, has not even completed the due process.

Earlier, my colleague the Hon Todd McClay took a point of order to try to return this bill to select committee, because what had happened was that when the select committee in the previous Parliament was considering this bill, we had—I think Jamie Strange mentioned—more than 50 submissions on this bill. Not all of the submissions were even heard and the select committee did not even consider the departmental report, and I am unsure how the Minister can actually claim that this bill has gone through proper process in this House.

This House is about listening. This thing that I’m talking about is democracy, and there is such a terrible injustice when good people in New Zealand make submissions to select committees for a particular piece of legislation—they want their voices heard.

The Minister has actually said that there will be lots of SOPs—Supplementary Order Papers. What that means is that he himself recognises that this bill does not fit what a good bill is supposed to be. That means there are major issues with the bill that is currently before this House that we are debating if it has to have Supplementary Order Papers. One of the questions that I’d like to ask the members opposite is that since the last election, we have now had six months of House time: why could the Government not have returned this bill to select committee so that we could have had plenty of time to go through the process of actually examining the bill, looking at the submissions, talking to the officials, examining the departmental report that they were going to produce, and actually considering making changes to the bill?

In the previous incarnation of this House, the Commerce Committee worked really well, and that was before the Economic Development, Science and Innovation Committee, when members of the Opposition as well as the Government—all of the parties—were involved, and I have to commend all of the members who did that. Through the submissions process, there were some suggestions that a certain bill actually get changed, and the thing that was really lucky was that the Minister who was responsible for the communications portfolio was the Hon Amy Adams. I, as the chair, approached the Minister and said that there was a submissions process and there were some suggestions through the submissions process by submitters that certain aspects of this bill change, and she was really open to it. She had given the select committee the opportunity to completely redraft the bill, and that was one of the major highlights of my chairing a select committee. I think every single member who took part in that process, from right across this House, would agree that that’s how a select committee is supposed to work.

The process in this particular instance—I will read the email that I received from the former clerk, who said, and I’m quoting part of it, that “The Fair Trading Amendment Bill has now been discharged from the Economic Development, Science and Innovation Committee. This is because although the original scheduling for the dissolution of Parliament meant that the bill would be eligible for reinstatement in the 53rd Parliament”—that means we didn’t actually finish the work, and it would have been reinstated when Parliament resumes. But because there was a delay in the process of the election, the actual end date for reporting back came up on 12 August. That means that that had actually passed, and that means this bill had to be returned to Parliament and it doesn’t have an opportunity unless this House sends it back to a select committee, and it should have been sent back to a select committee.

There are aspects of the bill where this bill amends the Fair Trading Act of 1986 and I think Jamie Strange mentioned something which talked about how, as a member of Parliament, we also doorknock, and if there was a sticker saying “Do not knock”, what would that actually mean to us as a member of Parliament. It actually shows that as chair of the Economic Development, Science and Innovation Committee, he doesn’t actually understand the bill, either, and it should have been sent back so that all of the new members could get to grips with this bill.

We are not opposed to protecting the consumer rights. We are wanting to protect consumer rights, but the thing is that this bill should have gone through the right process so that it could be examined properly and returned to this House for recommendation so that the bill could have been changed. Now we have to deal with it as an SOP, and I haven’t seen the SOP and I’m not sure if we can actually support it.

One of the submitters, Business New Zealand, said—and I will quote what they said—“It would be fair to say that addressing this issue has been a lengthy and repetitive process and we have consistently made the point there must be clear evidence of a significant problem before any of the changes proposed are enacted. At no stage during the process—now lasting around 16 years—have we had any clear evidence yet despite this, issues apparently already dealt with have now resurfaced. This raises the obvious question—what has fundamentally changed? Despite exhaustive issues and discussion papers over time, we still remain perplexed as to why these same issues keep coming up when no legitimate problem has been clearly identified.”

One of the things that I am really confused about in this bill is when they talk about a specific terminology—“unconscionable conduct”—which most submitters actually objected to, because the bill does not define what unconscionable conduct is. Nobody wants people to be cheated out of their good savings or anything, but the thing is that it has to be narrowly defined, in my opinion. Unfair conduct such as the use of pressure tactics, deception, or targeting vulnerable people, which some of the other speakers have talked about, is something that we certainly do not want in New Zealand, and we need to protect the consumers. But we already have laws that protect them, and these laws are already in place. I don’t think that this law, this piece of legislation, is good enough work, and I oppose this bill. Thank you, Madam Speaker.

This bill will be remembered in this House as being a bill that’s brought out many ironies. First of all, let’s set the record straight. Jonathan Young was the chair of the Economic Development, Science and Innovation (EDSI) Committee when this bill was referred to select committee—

💬 Melissa Lee: Good chair.

Maybe not as good as you, Melissa, because what happened was he had six months to write the report and he had six months to direct the work of that select committee to finish this report on such an important bill, but did he? No, he did not and, unfortunately for him, my good colleague here has taken over the good electorate of New Plymouth and so we have an even better chair this year, Jamie Strange, chairing the EDSI Committee, making sure that we stay on schedule.

This bill had six months in select committee. What happened was that they did not arrange for the submitters to make their oral submission in time, before the time that this bill was due, and what happened was that our officials from the Ministry of Business, Innovation and Employment (MBIE) had to end up writing the departmental report for this bill. What they did—and credit to them—they actually went through all of the written submissions and actually included their opinion into their departmental report, which we have at the moment. There had been already 20 oral submissions that Jonathan Young got to, but there were still a lot left. But what happened was that they did submit written submissions so we have them here in the departmental report here today.

You know what I said—that this would be a bill that brings out many ironies. I was actually reading Hansard about a month ago on this bill. Do you know what Jonathan Young said when he got up to speak—

ASSISTANT SPEAKER (Hon Jacqui Dean): Not me. Order! Order! Not me.

Excuse me, Madam Speaker. When Jonathan Young got up to speak on this bill in the first reading, he said, “I am so pleased it’s coming to the Economic Development, Science and Innovation Committee.” and then—blah-blah—“We have had such a light workload”—blah-blah-blah—and then he said, “he can have assurance that we will do the job unbiased. We will do it professionally.” Did he? No, he didn’t. He had six months to complete this bill, to hear all of the submitters. Technology’s an amazing thing—we did go through COVID—he could have called them on Zoom. He did some of them but he didn’t finish all of them.

What I would like to turn to now is actually the substance of this bill. Like I said, irony prevails in the way that the National Party has handled this bill. I still remember my colleague Dr Deborah Russell when she first spoke on this bill. She said it was incredibly ironic how the National Party would not be voting for a bill that actually supports small businesses here in New Zealand. This bill was designed so that small to medium sized enterprises (SMEs) would have a fair opportunity to do business here in New Zealand, so that they didn’t have to stand up to the big companies and actually be bullied into contracts that were unfair for them. So this is a situation where we find often small businesses in the situation of David and Goliath—when they had to take a contract because maybe the bigger company was their sole supplier, it was their only source of business.

But we want to make sure that New Zealand remains one of the best places to do business in the world. We’ve retained that reputation. We want that to continue, to last into generations, and so that is why we have to legislate this bill, to make sure that businesses in New Zealand can do it fairly so that they’re not bullied, like in the report where we’ve seen that 45 percent of businesses get bullied when they’re actually doing business. We know that they are.

SMEs are the fundamental foundations of our economy as we look at recovering from COVID-19, and what a great Budget we have to do that, to lead us into that. We need our small to medium enterprises to be able to feel safe while doing that, to be able to write and get into fair contracts while they’re doing that. They need to make sure they have the support of this House, of this Government. That’s why I am proud to be in a Government that looks out for small businesses to make sure that no one gets bullied when they’re just doing business in this country.

There’s a third part that I think is really, really important that I would really love to talk about, which is the doorknockers or the people that come up and do door-to-door selling. As someone who comes from a migrant community, can I just reflect on a very personal note that they are actually very scary for people who might not speak fluent English. They don’t know who’s at their door. They might not understand the whole entire context of why they’re there. And often the tactics they use in order to sell their products are quite pushy or sometimes even quite abusive. And in that way, I think this bill will actually set the safeguards for all communities to be able to feel safer in their own homes so that they will not get bullied into buying things; so that for fear of their own safety they will not have to agree to spend ridiculous amounts of money in order just to get someone away from their front door.

We’ve heard of the example of encyclopaedias. I’m sure many who are listening to Parliament TV tonight will be looking at their collection of encyclopaedias at home and reminiscing about the time when they were forced or they were bullied into having to buy that set. So today, as we talk about this bill, as we get on with actually legislating this bill, we are looking out for consumers in New Zealand so that they actually feel safe in their own homes.

We know that in New Zealand doing business is extremely important. That’s why in this bill we have to actually achieve the right balance. We’ve talked about that and MBIE, our department, has done so well in trying to balance that, and we know that that balance will be further achieved with all of the Supplementary Order Papers that the Minister will bring about, because we are actually trying to do the hard mahi that was left out by the select committee of the last Parliament. I think this bill is really, really important in terms of protecting our businesses, protecting our consumers, protecting everyday New Zealanders, but also protecting our economy so that we have the right climate for businesses to be attracted to New Zealand—even for the incentive to actually be able to start off businesses, because we all know that businesses start off small. Every business, even the large ones that we see that have prospered in New Zealand, they started off small, and we want to make sure that they have a fair go in our economy and we want to make sure that the law actually protects them and makes sure that they get given a fair chance. And so that is why I’m commending this bill to the House.

Kia ora, Madam Speaker. I rise to make a brief and succinct call on the Fair Trading Amendment Bill. Look, I support the intent of the bill and the direction it’s taking to clamp down on unfair practices and protect consumers, and I think this bill makes a commendable move towards ensuring that our consumers are better protected from unfair practices.

I wanted to touch on one of the submissions that was co-written by Beryl Anderson and Sue Kedgley, one of our former Green members of Parliament, from the National Council of Women of New Zealand. They felt really strongly about clause 9, which is around the directions to leave premises or not enter premises. I acknowledge that, as Naisi Chen mentioned, there are communities that are actually far more vulnerable and feel much more targeted by door-to-door salespeople, and this includes women, people who do not speak English, people who are disabled, and so I do think that the intent of this bill to safeguard and protect consumers is really important. I think back to a time where I—in between being a student and finding a more permanent job—took a very, very brief stint as a door-to-door salesperson for an electricity retailer. I have to say that the experience was so uncomfortable, because you were encouraged to actively try and get into someone’s home and to be as coercive as you could to get that commission. And I think about the fact that we’ve created a culture where companies are incentivised to push workers towards unsafe situations that ultimately put our households into unsafe situations. So I think the intent of this bill, in terms of protecting consumers and actually making sure that our companies are not also putting workers in a situation that is not safe, is really important and a really key move to ensure that the way that we conduct commerce does not put people in danger.

Sue Kedgley also noted some of the imbalances between big businesses and smaller retailers that clause 6—inserting new section 8—aims to address, in terms of ensuring that there’s some safeguards to ensure that small businesses that feel like they’re targeted have avenues to deal with that. One of the examples they made was around supermarkets penalising suppliers because they promote or sell products to other retailers. I think the example in the supermarket industry and in the food industry is a key one where this bill will, hopefully, ensure that smaller retailers who work around food are not at the mercy of big supermarkets in terms of unconscionable practices. And that’s something that has been raised for many, many years. So while we can litigate time and time again what unconscionable conduct is and we can work, hopefully productively, across the House to put really strict definitions around it, ultimately I think the key call from the communities has been that big retailers and companies that engage in door-to-door sales have had far too many powers and that consumers have not been well served by our legislation.

So while I hear comments from members from the other side of the House around the process and I hear some qualifications around, perhaps, where some of the gaps may have occurred, I think there is an opportunity none the less to work towards progressive legislation that helps protect our consumers. So we commend this bill at its second reading. Thank you.

Before I start this speech—Mr Nash and Mr O’Connor might be able to relate to me—but the Encyclopaedia Britannica was a very useful tool for the four kids that were in my family, and, actually, it’s where I first saw a picture of New Zealand. So I think we shouldn’t really defame the pre-internet literature that was available to us at the time, and it served us well.

Mr Strange made a very strange speech, and there’s some very strange behaviour going on this evening. I think the last committee and this committee probably failed to define “unconscionable conduct” in a way that gives confidence to consumers and business. We need to ensure that there’s a well-functioning market—you know, you can’t just go to a tribunal or to the court for any old reason at all. There are some examples in the press today about a painter with a $16,000 quote for a two-bedroom house, deemed outrageous by the disputes tribunal, and it would be classified as four statements: outrageous, not unconscionable, but potentially unfair. So this is the sort of area and zone that we’re in.

We’d love to support this bill; we just can’t see how the Economic Development, Science and Innovation Committee has actually done the job of defining what is accurate around unconscionable conduct. We don’t think it’s sufficiently formed to provide clarification. Even the Citizens Advice Bureau have said that they think it’s unnecessary and that unfair or bad conduct is deemed as acceptable in terms of the types of cases that even they see. So we should all look at this and maybe send it back to the select committee and just be sensible about it. I know there’s obviously a massive majority on the other side, but maybe this is one where we actually go: “Right. Let’s just take this back and do a bit more work.” I’m sure Mr Webb would agree with me.

The one thing about New Zealand is that it does, in the Commerce Act, have a web of protection already for contract terms and conduct around various Acts. There are several tests there that actually protect both a consumer and a business relationship and a business to consumer relationship. So we’re sort of reinventing the wheel a little bit here. Even when the Ministry of Business, Innovation and Employment sought submissions around this, there were only about 50 percent of businesses that actually thought it was an issue that was sufficient enough to want to change the law. It is going to cause confusion and a lot of court time—a lot of resolutions that will have various different opinions.

Now, I’ve actually got a definition from the Australian consumer commission, which we could use tomorrow, but it still isn’t applicable in some contexts to the New Zealand marketplace. But one exists, and I don’t understand why it’s not actually in the bill. Surely that should be one of the precursors of doing that.

So the elements of the bill, “unconscionable conduct”—the other big area that I think we’re all missing is just on the small contract terms. The transport industry made a very good point in the submissions that $250,000 wasn’t actually enough to help them, given the nature and size of their contracts, and they recommended that $500,000 be the best-case scenario. I think we should really take that into consideration because the size of transactions by various industries does vary. But given the fact that transport and haulage is such a major issue in this country, a load in the back of a truck or some dispute has a significance, more than some of the monetary sums that are in this bill.

So we’d like to get the officials to consider that the threshold to define “unconscionable conduct”—you know, when you compare it to “unjust” or “unfair”, it’ll take a large effect on what is happening in terms of harmful conduct, and the lawyers will have a field day.

So the financial markets, the Citizens Advice Bureau, the supermarkets, everyone is challenging the reason for this, and we need to do, I think, a better job around this bill. So we can’t impose this on business dealings. Let’s be sensible. We don’t want to create chaos in the market. We don’t want to actually do something that distorts day-to-day relationships with people who enter into contracts together. And we don’t need to put any natural bias into what is something that the commerce Acts already protect. So I’d like to recommend that we go hand in hand with industry, with consumers, and take New Zealand with us on this one, because I think we’re sort of imposing, as politicians, something that’s overly dramatic. We’d like the bill to go back to the select committee and then we’d like to review. And if the bill is needed or not needed, we should get it right. But at the moment, the status quo would probably be a preferable option to what is being proposed at the moment.

So we’d like to offer a comparison to the Australian market, which hasn’t seemed to have been done particularly well. And just to put it into context, we’re not talking about massive transactions here; you know, it could be a rental lease, it could be a franchise condition, it could be something that does involve door-to-door selling, but, let’s be honest, the amount of door-to-door selling that’s going on is very little now, and there are probably more problems, actually, on the internet. I also think that, with regards to direct selling, there is nothing wrong with that industry. It has a set of rules around it, and people make a living that way. So in that sense, ACT can’t support the bill as it stands at the moment, but we’d certainly be open to review at such a time as the definition was more clear. Thank you, Madam Speaker.

Talofa lava, Madam Speaker. I rise in support of this bill, and I would like to try and make this a genuine discussion, so I want to actually try and respond to some of the comments that you’ve made.

ASSISTANT SPEAKER (Hon Jacqui Dean): Not me. Order!

Sorry, the member Damien Smith has just made.

I worked as an employment lawyer for a long time, but I did law generally, and one of the gaps that I saw in the law is going to be filled by this bill. Because what we had was a situation where we started to understand the vulnerability of an employee, but we ignored the vulnerability of the fledgling companies that were actually the same employees trying to live their own life on their own terms. They got crushed by bigger companies that use these kinds of tactics.

Now, one of the case law points that I think is interesting is a case that was about Home Direct. With Home Direct what they did was they set up a standard contract, which would be covered by this bill, and the standard contract had in it that people who bought the goods at the door would actually sign up to pay for the goods over quite a long period of time. When they’d finished paying in full for the goods, which were at an inflated price, the contract had in it a point which meant that they actually continued to pay. They paid and that money went straight to Home Direct. In exchange for that, they got vouchers. So if they did not use their vouchers to buy goods from Home Direct within 12 months that was forfeited. That cost people in this country $600,000-plus in one year, and that was just for the vouchers that were forfeited, not for the people who spent their vouchers. That is an unconscionable kind of agreement. It’s actually something that’s well defined in this Act.

So what the purpose is of having a definition over something like this, a very general definition, is the same purpose that you get with something like good faith. So a concept like good faith got introduced, it was a general concept, but it came in on a wave of people’s thinking and case law. The same is true here. There is a lot of case law in Australia on what unconscionable conduct is. There is actually a very good formula in this bill. There are eight points which you can look at in the bill, and there’s a catch-all so you can actually go—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order!

Sorry, I apologise, Madam Speaker. So if you go through this bill you will find those eight points. Sorry, the member will find those eight points actually point the way to the kind of conduct which I doubt the member thinks is acceptable. Those things are all looked at by a court and balanced. Actually, if there is something new that a new instigator comes across, because people are very inventive in the way they will track others, then actually this law allows the law to evolve. So it will catch the situations where people are being exploited.

Now, I want to talk about the fact that this law actually moves to an area where it looks at businesses that are basically doing business at about $250,000 a year. It is absolutely right, as the Green member said in his speech, that we have all seen this for a long time. We have known that our big supermarkets, for example, hook in a supplier, get them into a situation where they’re now dependent upon that supermarket chain, and then they actually just continue to erode and erode and erode the amount that they’re paying the supplier. It actually brings those people, those businesses and their families, to their knees. They’ve often actually invested in huge amounts of equipment to make something. They might have created a new form of jerky. They may have brought a new form of yoghurt. They need our help and support in getting a fledgling business off the ground. They need to be supported for all our sakes because they are our innovators. They are the people who will actually make this country stronger, and they actually need to be seen and recognised for what they are, which is vulnerable. They are also creative. They are also interesting, and they need our support.

Actually, a party like ACT would be likely to be able to see that if it looked at what the purpose of this bill is. The purpose of this bill is to actually do several things at once. It is a purpose that is set out by the Minister as promoting competition and protecting the people we have and protecting businesses against unfair practices. So it’s always about promoting competition. Those things are not in tension. They complement each other.

We need to nurture our small businesses and our people, and this law does this. It is not OK to delay payments, to unilaterally add duties and cost to businesses. It is not OK to blackmail them, and it is not OK to bully them. The word “unconscionability” will grow in the minds of New Zealanders under this law. And we will all understand that that is not just good business, it is not hard business, it is unconscionable behaviour, and so I’m very proud of that term.

The term “unconscionable” here, just to drill down a bit, if you go to the bill you can see that it involves the balancing of what about the conduct that is not necessary. It is not appropriate. So it’s always looking at is this a necessary term? And if we go back to the Home Direct example we can see how that applies. Because was it necessary for a company selling a good to somebody in their house to sign them up for a contract which actually meant that they were getting their money after that purchase had been completed? Was that necessary? Was it appropriate? It was neither. And so when you look at the actual terms you will see—

ASSISTANT SPEAKER (Hon Jacqui Dean): Ahem!

—sorry, I apologise, Madam Speaker. I will get used to it and change my habits.

So the bill actually talks about the eight factors. The eight factors that the bill will involve are assessed as “the relative bargaining power of the person engaging in the conduct”. It will be a matter of looking at the person and whether they have bargaining power. So if it’s a supermarket and a supplier there’s an obvious issue here. “The extent to which the trader and an affected person acted in good faith:”. Again there is an importation of a terminology which actually has become commonly understood in New Zealand through the case law. “Whether, taking account of the particular characteristics and circumstances of an affected person, the affected person or the affected person’s representative was reasonably able to protect the affected person’s interests:”. Again, we’re talking about the particular person and their vulnerability.

“Whether the person was able to understand the documents that were provided, (e) whether the trader subjected an affected person to unfair pressure or tactics or otherwise unduly influenced” that person. Again, the whole idea of “undue influence” is something that as lawyers we know and understand, and it would be very, very good if one of the ethics that we grew in the society was not to unduly influence. Whether the trader failed to disclose to “an affected person—(i) any intended conduct of the trader that might adversely affect the affected person’s interests:”, or any risk that that has to that person. So that’s about saying to somebody, “This is the risk you’re taking. This is what you’re actually doing.” That’s actually about informing them, and that’s a very important thing. It’s very, very well-established in other parts of the law.

What we’re doing in this bill is we are changing the way that people think about these things. This is no longer legitimate, hard conduct. This is us all learning to live in a society where there are big multinationals, where there are sophisticated characters out there who will actually take out their competition, who will actually do that if we do not actually have decent rules for a decent way of managing those relationships. And so I am absolutely proud to commend this to the House.

It is my pleasure to rise this evening on behalf of the National Party, and as the member of Parliament for Southland, to speak on the Fair Trading Amendment Bill. The National Party opposes this bill. The National Party supports sensible, transparent, and straightforward regulation that prevents the exploitation of vulnerable consumers, increases trust, and lowers transaction costs. That is why the last National Government amended the Fair Trading Act 2013 to streamline and simplify regulations, decrease the compliance burden on businesses, while developing a fair trading environment for consumers.

Uncertainty created by poorly crafted legislation, on the other hand, is effectively a tax on small businesses. Labour needs to understand that increasing uncertainty and piling cost on to businesses will end up hurting the very consumers that they think they are helping. New Zealand needs a Government that is focused on removing unnecessary or burdensome regulations and allowing Kiwi businesses to survive and thrive; not one that’s hell-bent on piling on ever more rules, directives, costs, guidelines on businesses.

We already have laws in place that can be used to prosecute those who do try to exploit vulnerable consumers. What Labour seems to fail to understand is that every time they introduce a new rule, they are creating additional costs for businesses, in particular small businesses, and ultimately harming the consumers they think they are protecting. Without defining the definition of “unconscionable conduct”, what they’re, effectively, doing is they’re creating work for lawyers. And having been a lawyer, I can say this: there’s going to be a lot of litigation over the terms of this Act and this definition.

We look through some of the factors that the court can take in regard, in determining what’s unconscionable conduct, and we see “whether an affected person was able to understand any documents provided by the trader:”. Well, how is a small-business owner going to possibly figure out whether someone understands their documents or not? That’s placing an unnecessary, onerous, and subjective burden on small businesses.

Let me just speak to small businesses, who this will affect the most. Small businesses are the engine room of New Zealand’s economy. In fact, 97 percent of all New Zealand’s businesses are classified as small or medium sized businesses. They employ nearly a third of New Zealand’s workers and they generate more than a quarter of our economic output.

💬 Hon Stuart Nash: Absolutely.

Simply put, as Mr Nash will know, what happens to small businesses matters, in this country. When they thrive, our economy thrives. When our small businesses suffer, our economy suffers, and right now they are suffering. Most small-business owners are under immense pressure and are working hard just to make sure their businesses survive.

In fact, even today I’ve received a letter from a small-business operator who is not able to get more employees because this Government has decided to clamp down on immigration settings. Some of his employees have left because the visas aren’t being rolled over in time. He can’t get more, and he’s asking me, “I’m starting to wonder if it’s even worth keeping on going.”

And this bill—

💬 Hon Member: Tell him to pivot—pivot your business!

Just pivot your business—find something else! It isn’t going to work, and this is a classic case of why this Government does not understand what small businesses need.

💬 Hon Stuart Nash: Come on, Joseph. You’re better than that, mate.

I have been in small business, Mr Nash. I have worked past midnight many nights in a row, and I’ve had to deal with regulations and try to keep the business operating, try to keep my people paid, try to make sure the bills are paid, and I know how tough these regulations are. And if you’re a small-business owner, you are operating on very small margins. You do not—

ASSISTANT SPEAKER (Hon Jacqui Dean): Not me. Order! Not the Speaker.

My apologies, Madam Speaker. When one is a small-business owner and is working usually very long hours, usually paying oneself last, and you have all these regulations that one has to comply with, it is incredibly difficult. One does not have the resources that a larger business has to figure out how to comply with all these regulations. This is a classic example of uncertain law that will place more compliance costs on small business and make it, frankly, harder for small business operators to operate.

This is irresponsible of this Government not to take into account the impact its regulations are having on small-business owners, so I do not commend this bill to the House. I would recommend the Government take a look at this and provide some certainty to our small-business operators, who are employing about a third of New Zealanders and are making sure that this country keeps going.

Tēnā koe, Madam Speaker. A pleasure to rise and stand here and take the call that the Māori Party would take, should they choose to, but once again they choose not to. I do find it extraordinary that a party that claimed, or the leader that claimed in his maiden speech, to be speaking on every piece of legislation in this House, to scrutinise it from a Māori perspective, has once again chosen not do so.

But over here, we heard from Mr Mooney, and the irony of hearing the usual National Party lines around small business and freedom from regulation when this bill—

💬 Joseph Mooney: Point of order, Madam Speaker. The member used the word “lies” and that’s not parliamentary language.

ASSISTANT SPEAKER (Hon Jacqui Dean): Did the member take offence?

💬 Joseph Mooney: The member did take offence, Madam Speaker.

ASSISTANT SPEAKER (Hon Jacqui Dean): Withdraw and apologise.

I withdraw and apologise. I look forward to reading Hansard, and I hope the member will read Hansard as well. And perhaps if he’s—my office is just over the way; he’s welcome to drop in with a case of whisky to make amends for that error of his.

But the point is this: that this bill has its sights set on protecting small businesses from the predatory practices of large businesses, and that member has missed the boat entirely. Here he is talking about this putting more burdens on small businesses, when it does the opposite. It arms them with a remedy so that if a large business acts in a way which is oppressive, unfair, unconscionable, if it exerts its powers in a way which is utterly unreasonable—and we know, we’ve seen that this happens. I mean, not so long ago we heard about Fonterra unilaterally telling its creditors that it was going to 90-day payments, isn’t that right, Mr Nash? I believe it is. And that was utterly unconscionable, but the power lay all on one side, and it took intervention from the outside for that outrageous decision to be reversed.

Well, this will not allow unfair terms like that to be imposed on small businesses. Whether they be dairy farmers or whether they be dairies, this is a bill which actually puts the power—and what it does is it redresses the imbalance. We know that unconscionable contracts have always been illegal, but the problem is the remedy. What this piece of legislation does is it puts tools in the hands of the Commerce Commission so that litigants don’t have to go to the courts at huge expense, that the agency that is tasked with making sure that our markets work effectively and efficiently can take the appropriate steps to redress that imbalance. And so for the suggestion by Melissa Lee that “unconscionable” was a vague term, it’s a term familiar in our law since about 1600. It’s got a very clear definition, and it’s about imbalance of power. In fact, in what was the Credit Contracts Act, now the Credit Contracts and Consumer Finance Act, that term appears there as well. It’s well established that unconscionability is about a vulnerability, an imbalance of power, and an abuse of that relationship, and that’s what we’re looking for. So if—

💬 Melissa Lee: If that’s the case, then find it in the legislation.

Once again, look, I would invite you to just do a little bit of reading, because the fact of the matter is that this is very clear, and the law, time and again—and the other point is this: that when you’re using terms like “unconscionability” and “unfairness”—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! Order! Not the Speaker.

Thank you, Madam Chair, I stand corrected. When one uses terms like “unconscionability” or “unfairness” one needs flexibility, flexibility to take into account the multitude of arrangements that may be unfair or unconscionable. So we’re not going to constrain the Commerce Commission or our courts, we’re going to let them—and trust their judgment to address the problems that arise in the market.

So this is a bill which is excellent. It’s a bill which is going to make our markets work better, and we know that a good market is an efficient market, and an efficient market is one that has free information and equal bargaining power. That’s what this creates. That’s what the Economic Development, Science and Innovation Committee that considered this, that Jonathan Young chaired, failed to report back, but this Government isn’t going to let that stand in the way. It’s going to move this legislation along and make New Zealand better for it. Thank you, Madam Speaker.

Talofa lava, kia ora, namaste, Madam Speaker. It’s my pleasure today to rise in the House to take a call on the Fair Trading Amendment Bill, which amends the 1986 Act to introduce new protections against unfair commercial practices. These unfair commercial practices exploit vulnerabilities of a consumer or a small business, and this bill addresses this in three ways: first of all, by prohibiting unconscionable conduct in trade; secondly, by extending the Act’s existing protections against unfair contract terms in standard form consumer contracts to also apply to small trade contracts; and, thirdly, by strengthening the ability of consumers to require uninvited direct sellers to leave or not enter their property.

The Act currently provides protections against unfair contract terms in standard form consumer contracts. So what are these standard form contracts? These are the “take it or leave it” contracts, where the party accepting the contract has no real ability to negotiate its terms. The bill extends these protections against unfair contract terms to standard form small trade contracts. These are contracts between businesses with the actual expected value of less than $250,000 in any 12-month period.

I was recently looking at a report from the Royal New Zealand College of GPs’ Workforce Survey, and they said 42 percent of GPs are either small businesses or contractors. Last year, during COVID, a lot of these GPs were front-line healthcare workers, and I heard from a lot of them, because one day they were out there working in the global pandemic; next day, they received a call from the small medical practice and they just said, “Well, sorry, don’t come back the day after. We don’t need you any more.” Now, this conduct was against the conscience by reference to the norms of the society, norms of acting honestly, fairly, and without deception or pressure.

But that’s not where it stopped. The GPs also had in their contracts that they couldn’t work within a certain radius from the actual medical practice. So you couldn’t work for 10 to 15 kilometres from the practice that had just terminated your contract, with your business. Next day you had absolutely no job; you couldn’t work anywhere in town. This was even worse if you actually worked for a big commercial entity that owned 30, 40, 50 practices. If you worked in Auckland, if you worked in Hamilton, for one of these practices, you just couldn’t work anywhere in town. It’s about protecting the rights of small businesses, and this is just one example in healthcare, but this applies to businesses across the board, not just in healthcare but other businesses as well which don’t have these protections.

We’ve heard today from the other side, many of whom want this bill to go back to the select committee. As some of my colleagues have talked about it—you know, people like Melissa Lee and other members on the other side—they keep forgetting that they were in charge of the select committee through which the bill came, and for six months there was no report from their side. But in many ways, the country is lucky that they were only in charge of the select committee and not the House, because if they were, well, we know what would happen. Couldn’t figure out who the leader of the party was, couldn’t figure out whether we should keep the borders open or not—they couldn’t even figure out if they should write a report or not, for a bill that we’re discussing right now. Apparently we should now, but not for six months when you had the bill.

So aren’t we glad that we just had them for the select committee, for six months, to not be able to write a report, rather than in the House, where they can’t decide who the leader of the party is, they can’t decide whether we keep the borders open or not. The select committee had the bill for six months, and now they want it back. We are lucky that we had departmental reports on this where they had provided enough information, collating the information that was submitted to the select committee about how the bill should go ahead for the second reading. Now, thank God that the Labour Party is doing the job that we were asked to do.

But, again, I bring back the point of small businesses, like the GP practices, where the small businesses, the GPs, didn’t have a bargaining power to take care of that contract. But, also, there was no good faith from practices which fired these GPs last-minute in the middle of a pandemic, and that’s what we’re trying to prevent. The people who are out there making their living and in good faith working for another business, with another business, have that protection in place when their own business makes less than $250,000 dollars in 12 months.

So I would like to commend this bill to the next stage, because I know the National Party hasn’t done their work.

Well thank you, Madam Speaker. Dr Gaurav Sharma is a new member, so we’ll have to give him a bit of latitude, but he may not have been aware—in fact, it sounds very much like he wasn’t aware—that we had a lockdown and select committees didn’t meet. Select committees couldn’t come to Wellington when we went out of level 4, actually. So the member might like to go and read his relatively recent history—

💬 Hon Gerry Brownlee: No, he’s happy being ignorant.

Well, OK. Yes, perhaps he is happy being ignorant, but we’ll leave him with that.

I think a lot of the speeches tonight have swung around the point of unconscionable conduct. You know, I would think after Dr Webb’s excellent definition there, I’ve finally realised what unconscionable conduct is. It’s promising to build 100,000 homes and delivering 800, if you’re lucky, with a tailwind. That is definitely unconscionable conduct. So I’m glad we’ve cleared that up. However—

💬 Hon Michael Woodhouse: Not funding GP practices in a pandemic; that’s unconscionable.

Well, that’s right—or promising to do all the vaccinations; not having the vaccine. Promising that we’re at the front of the queue, and we’re not; we’re way down the back. [Assistant Speaker gestures for member to return to subject of bill] Well, this is absolutely related to the bill because unconscionable conduct is a major part of this bill. I could go for 15 minutes on unconscionable conduct—given the look on your face, Madam Speaker, I will actually move on.

But I think it is very interesting to note that Business New Zealand opposed this bill. And I think the last sentence in the piece that I’ve read is, and I’d just like to quote this, “Despite exhaustive issues and discussion papers over time, we still remain perplexed as to why these same issues keep coming up when no legitimate problem has been clearly identified.” I think that’s—

💬 Hon Stuart Nash: That’s not true.

Well, it is actually true. I think everyone in this House would agree vulnerable people should not be taken advantage of. Absolutely agree with that. Vulnerable businesses should not be taken advantage of. I’ve been a businessman. I know what it’s like taking out contracts. Is it a level playing field? It’s never a level playing field. One will always be bigger than the other. The buyer, depending on the product that you’re selling, is actually in a better position, particularly if there’s plenty of product around. On the other hand, when there’s not a lot of product around, the seller is in a good position. And I know in the wine industry at the moment, that’s absolutely what’s happening. Because of the short vintage, buyers are now disappointing people they didn’t have contracts with because they can’t supply, and they’re choosing buyers at a higher price. So what—

💬 Melissa Lee: That’s unconscionable.

Well, under some of the definitions we’ve heard tonight, that might well be unconscionable, even though it isn’t in contract.

I think what we have to also ensure we don’t mix up here is unconscionable conduct and buyer’s remorse, and that is a very common phenomenon. People buy something, they think they want it, the next day they think, “Oh no, I don’t really want that now.”, and we could end up in that situation with this bill. So we don’t disagree on the definition that we don’t want to see vulnerable people taken advantage of or vulnerable companies taken advantage of. But is this bill going to do it? Well, according to Business New Zealand, it’s not going to do it. Also Consumer New Zealand, although they supported it—they thought that the definition of unconscionable conduct to ensure the provisions work as intended and to avoid division about the meaning of the term as there has been in Australia.

We only have to look over there to see the issues that we’ve had in this sort of legislation. I think we’ve got a lot of problems when we have these sorts of things coming through where case law will define at some point in the future what the definition is of unconscionable conduct. If Dr Webb is so certain on the definition of unconscionable conduct, why didn’t they put it on the bill? No answer.

The reality—

💬 Dr Duncan Webb: Yield. Yield.

I think the jack-in-the-box over there has had his turn. The real reason here is—in fact, this is another act of unconscionable conduct. This bill had not been reported from the select committee. It could and should have gone back to select committee. Instead, the unconscionable conduct of this bill will be to dump a whole lot of Supplementary Order Papers in the committee stage on the House with no forewarning, with no proper process—

💬 Melissa Lee: Due process.

—where we can—due process; that’s correct. Where we can actually get submissions from the people it will affect—the people that will know out there–that’s how good legislation is made. That’s what we have a select committee process for. Our parliamentary system is built on that. But unfortunately, in this Government—again, unconscionable conduct—they have taken every opportunity, in this case six months doing nothing, then they dump something on in real haste to try and get it through, ram it through without due process, and we’ll be back here fixing it. I guarantee it.

Most of the legislation that’s been passed under urgency in this House is shoddy. It has all sorts of problems, and we’ll be back here fixing it. The members on the other side all hanging their heads, they know that’s right. Well, the new ones might not, but the others do. And that is a waste of parliamentary time. It’s a waste of the public’s time, because they’ll be the ones that bear the brunt of poor legislation, and we’ll have to fix that up, and I think that’s really appalling process. So with that, I condemn this to the House.

Talofa lava, Madam Speaker. It is a pleasure to wrap up this side’s debate on the Fair Trading Amendment Bill second reading for my friend and colleague who is shepherding it so ably through the House, the Minister of Commerce and Consumer Affairs, David Clark. Really, we’ve heard tonight that this is about the David-and-Goliath relationships that can occur in commerce. So, yes, there can be level playing fields, but very, very frequently there isn’t, and we don’t assume that the playing field is fair. I guess that sums up the difference between the arguments on this side of the House and the other side of the House. This piece of legislation, which will significantly change the landscape of consumer law, really does look at behaviours. It promotes competition but it also ensures that the behaviours that occur during contracting enable fair contracts and reduce the chances of exploitation.

I didn’t sit on the Economic Development, Science and Innovation Committee. However, I do have, amongst my extended networks, firsthand experience of individuals who have been really unfairly impacted by unfair contracts, and I’ll come to that later. But also, like members on my own side and on the Opposition, I’ve been a small-business owner. Like Joseph Mooney, I’ve had to deal with cash flow, deal with paying contractors and staff before myself, deal with contracts, deal with the pressure of trying to find contracts, deliver on contracts, and report on contracts all at the same time. For me, I would have welcomed this piece of legislation with my small business because it would level the playing field. We all know that many contracts, particularly by really big suppliers, involve pages and pages and pages of fine print, and who really sits there to read those to find out whether they are putting themselves at a great disadvantage?

I said in my maiden speech, last year, that I am in this House because I’m interested in and committed to economic justice, and this bill really does go towards that. It assumes that contracts should benefit both parties and not be exploitative. It is about fairness. It addresses specifically things like pressure tactics, deception, the one-sided contract terms, and the general exploitation of consumers and small businesses. It also arms businesses with a remedy, as Duncan Webb has so rightly pointed out. It includes prohibiting unconscionable conduct in trade, as we’ve heard, and it also extends protections against unfair contract terms to include small trade contracts. For those watching at home who may not have been tuned into the previous parts of the debate, this applies to small trade contracts where the trading relationships exceed $250,000. And it applies to the following types of contracts: franchise agreements, telecommunications contracts, retail leases, independent subcontractor agreements—so many of those happened in the industry that I had my business in, which was in television—in waste management terms, and also supply agreements in the agriculture sector.

With unfairness, the elements really are whether it causes a significant imbalance in rights and obligations of the parties and whether it isn’t reasonably necessary to protect the interests of the benefiting party and whether it would cause detriment. So that is a robust test. It is a clear test on fairness. It is based on the effects on the parties, and it can lead to the Commerce Commission declaration so that a term may not apply. To my mind, that is an equitable approach; it is about equity and it is about fairness.

Turning to “unconscionable”, which has had so much attention tonight, it is really important that we don’t define it. The Opposition know full well that defining a term in a piece of legislation means that it has a limiting effect to the things that fall fairly and squarely within the categories that are listed. This is about applying a threshold. It is about defining features, which can include relative bargaining powers, the requirement to comply when it is not necessary to protect the benefiting party, undue influence or pressure, and the extent to which parties acted in good faith. And that last element is really important. As has been traversed by our side, there is plenty of case law, both in Australia—case law that will evolve to further give us understanding of “unconscionable”. That term, as Duncan Webb has pointed out, has been around since the 1600s. It is a well-known legal term and it will continue to evolve. What we don’t want to do is limit it to a finite list or definition.

The good faith element of it also negates the possibility that was mentioned by another member opposite about buyer’s remorse. Somebody simply changing their mind about purchasing a product or a service or entering a contract would not be able to be exempt through buyer’s remorse. There would have to be those other elements around a lack of good faith or around unnecessary benefit to one of the contracting parties. The penalties are $600,000 for bodies corporate or $200,000 for individuals.

The Opposition, I understand, has raised concerns about the criminality elements to do with unconscionability, as well, and that was looked at by the Ministry of Justice who raised it with the Ministry for Business, Innovation and Employment (MBIE), and they noted that if one looks at unconscionability in the criminal sense, that mens rea is inherent. It implies good faith. Were there unfair pressure tactics? Was there inducement? All of that implies an intentionality which safeguards against a lack of mens rea for that criminal element. The other items that MBIE have noted is that there are parallel civil and criminal remedies already in place in the Act and that the penalty levels are consistent with existing penalties in the Act.

I’d like to turn now to the “Do not knock” element. In my own networks, this would have been a fantastic law to have in place for somebody who we know who bought encyclopaedias, bikes, cleaning products, and aromatic oils, and not only bought these products but signed contracts which meant that the funds were going out of their bank account, and every time they failed to have sufficient funds in their bank account, they also faced a bank penalty of $25. It took some undoing, each time these purchases happened, to get this person out of the contracts. They were able to live at home, they were definitely vulnerable, and they certainly would have benefited from a “Do not knock” sticker to protect them. That sticker, under this law, will fill a gap in the Trespass Act 1980, where one needs to identify the person who they are seeking to trespass, in order to get them to leave the property. It also actually upholds the principle of “one’s home is one’s castle”. It won’t apply to personal visits or charities or political parties, but it does involve a visible or audible direction to leave. Those who are interested in the stickers can actually get them from Consumer New Zealand.

So, to sum up, this bill goes towards the Government’s goal of creating a productive, sustainable, and inclusive economy. It is about fairness. MBIE has said that the elements needed to make that economy happen that way are trust, merit-based competition, reasonable opportunities for businesses to grow and thrive, but also to protect consumers from detriment. So it is about finding that balance. It assumes good faith in contracts. It provides a clear steer to the Goliaths in the David and Goliath relationship about the expected behaviours, and it looks at the impacts of the contracts, which is an equitable approach. It doesn’t assume a level playing field. It acknowledges that, in the current world, there are Davids and Golaiths in the contracting environment, and, therefore, it seeks to recalibrate so that there can be fairness, transparency, competition, and also protection for consumers. I’m delighted to commend this bill to the House.