Fair Trading Amendment Bill

Thank you, Madam Speaker. I rise on behalf of the Green Party to finally give our call on the Fair Trading Amendment Bill’s third reading. It’s been a long time coming, so I am glad we’re finally going through the motions of the House.

Look, this bill will go some way towards ensuring that consumers have a better deal when engaging with businesses. It also ensures that smaller businesses have better access to trade contacts.

I think, to me, the thing that stands out around this bill is the protections around ensuring that uninvited sellers are now warned against by the introductions that this bill puts in. So, for example, the “Do not knock” stickers provided by Consumer New Zealand now will have far more weight, and I think this is quite important as I think of some industries like electricity retailers and, often, the aggressive tactics that have been employed to poach consumers. In the last debate, I spoke about my own really brief experience of doing almost a one-off gig with one of these retailers. I think of just the predatory nature of these tactics against low-income communities and migrant communities, and I want to acknowledge the lengthy commentary that the member to my left, Naisi Chen, has given around the vulnerabilities of households where maybe English, for example, is not their first language and how they’re at far more risk. So this bill will introduce some good protections.

I think plenty of debate has been held around the definition of unconscionable conduct. I don’t think the Greens want to further extend our legislative session on this bill any more than it already has been, and I would encourage viewers to look at previous contributions for an enriching debate on this definition. So we commend this bill to the House.

This bill is typical of what Adam Smith called the misconception of the man in the system, and it actually opposes individual freedom of businesses and consumers to interact together. It’s based on the personal vision of the Minister, based on the greater good for all, as he perceives it, and it’s a leverage which lords over all of us. There is a myriad of rules and laws to protect unfair contract behaviour.

Extending the prohibition against unfair contract terms and actually defining unconscionable conduct is a major omission from the parity that he’s hoping to achieve with colleagues in Australia. It seems inconceivable to me to bring a bill to Parliament which is based on something that actually has 16 cases in Australia of businesses dealing with each other, and established case law, which clearly allows us to be able to define unconscionable conduct quite easily. In terms of retail leasing, an example of that would be: a landlord has sought an unreasonable rent for the renewal of his shop lease, which it represented as below market value, and has required a very short time frame for its tenants to respond to the proposal of the rental offer. The landlord’s conduct involved a small-business owner who had little or no ability to speak English, and the landlord was aware of this, so the landlord’s conduct was deemed unconscionable because of its actions. It was reckless, it showed no regard for conscience, and that was irreconcilable with the rights and reasonable behaviours of a business transaction.

So I’ve got a list of these, which—this one’s around franchises. This one’s around door-to-door selling. As an example, Craftmatic was found to have used misleading and unfair sales tactics to sell beds to elderly people during the course of home presentations. Craftmatic sales and promotional letters were designed, scripted, and conducted, as found by the Australian Competition and Consumer Commission, to unduly influence potential consumers to create and take advantage of an unequal bargaining position, and so the conduct was deemed unconscionable.

So there are various elements of Australian competition law which allows us to define unconscionable conduct quite easily, and we find it a mystery that this is not included in the bill. It will lead to court time and will lead to a very, very quagmired system, where we believe this is to be unnecessary.

Also, the impact analysis left a lot to be desired. If you look at the noughts and crosses of it, this is a sort of 50:50 call. It’s a “nice-to-have” bill, but it actually doesn’t change the landscape as such, as opposed to overcomplicated transactions.

So we would ask the Minister to consider looking at the redefinition of unconscionable conduct. It’s not difficult, and I’m sure his analysts could come up with a Supplementary Order Paper to that effect. We also believe that extending protection to businesses with a $250k transaction value cap is too small in this modern era, and we recommend anywhere between $450,000 and $650,000 to allow reasonably priced transactions and negotiations to be resolved. So in that context, we believe that it has a role to play in the system, but it will affect free enterprise and free trade, and for those grounds we can’t support the bill.

I rise in support of this bill, and it’s in its third reading now. During those discussions that we’ve had in previous readings, we’ve talked about the reason why unconscionable conduct is simply not defined. That’s because there’s criteria set out in that bill, so if you apply the criteria, then, actually, it is possible to predict whether the actions are unconscionable. But when you’ve got people who actually are creative in the way that they are basically holding people—or being sneaky, then you need something that’s more flexible and this bill does that.

It also extends the protections to unfair contract terms and consumer contracts for small-business contracts. That’s an area that’s needed a fix for a very long time, and I’m very proud that we’re fixing it in this legislation. Thank you.

Thank you very much, Madam Speaker. Well, it is a pleasure to speak on this bill, the Fair Trading Amendment Bill. I actually think it’s quite interesting that this bill seeks to level the playing field, and there’s no doubt that the playing field is not level often in transactions. In fact, having had quite some experience in this, I’d almost say it’s never level. If you’re a seller selling into a market which has lots of options for supply, then you are definitely on the wrong side of the scale. On the other hand, if you’re a buyer when there’s very few sellers, you’re also on the other side of the scale, and so it can be quite difficult.

I’d have to say that BusinessNZ opposed this bill. They said that “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 … identified.” I think that is kind of the problem here. We all want to try and level things up and make things fair—whatever that means—but it gets pretty difficult when you try and put this into writing and into a bill.

I can give you a bit of an example, Madam Speaker, because I know you’re aware of these things and you’re quite interested in them. So I thought I’d like to bring a story from personal experience selling wine into New York. I went to a Harlem wine store which would only be about the size of this Chamber—quite small, two floors—and the person that ran that won a Porsche car, a brand new car, from Johnnie Walker for selling the most Johnnie Walker in New York. From a small store like that, you’d wonder how the heck they did this. I was trying to sell wine to this guy. I was successful in the end, but, boy, did he drive a hard bargain.

Turns out he sold the most Johnnie Walker in New York because he sold to illegal nightclubs in New York. They had to buy their liquor at retail rather than wholesale because they were illegal. They’d run for a while, and then they’d be shut down, so he’d just go around selling all this alcohol. This guy knew how to bargain, and I can tell you, it never really felt to me like there was an even playing field there.

I don’t think this bill would have made much difference had it been in operation in New York. I know it doesn’t go that far, but, actually, that is the world of commerce, and until you’ve actually operated in it, you don’t actually know—not you, Madam Speaker, but everyone will not really understand how it works. It is never equal.

Also, we have to understand that people often suffer from what’s known as buyer’s remorse, and we have to be careful that these sorts of things don’t actually try and capture that. I think that with the definition of unconscionable conduct being so unconscionable that no one actually knows what it is—despite Dr Webb giving us a bit of a lecture about it in, I think, the second reading—it turns out that it is so difficult to define that we can’t get it into law. So then we end up with some people making a decision on a very broad definition, which will undoubtedly capture people that don’t deserve to be captured by this law. It is understandable that people want to go to an extreme of trying to cover everything off. It’s actually very akin to hate speech legislation—so broad that nobody really knows what it is, and innocent people will be captured.

I think the law of unintended consequences, with all these good intentions, is going to cause more problems than anyone in New Zealand deserves. I think it’s really very sad that we are here today in the House dealing with this bit of legislation, which is misplaced. It might be well intentioned but, unfortunately, takes me back to my time in Harlem and brings back some fond memories. I have to say, I had a—

💬 Matt Doocey: Tell us another story about Harlem.

Well, I could. I could tell a story to you, Madam Speaker, but the whip warned me before not to incriminate myself, and, taking his wise counsel, I will leave it there. But I’m having a very qualified “not supporting this bill” opinion, and so therefore I do not commend this bill to the House. Thank you.

One of the reasons I like this bill is a very simple provision in here, which says that persons engaging in an uninvited direct sale must leave, or not enter, a consumer’s property as soon as possible after being directed. So if there is a sticker on your door that says “Do not knock”, once this bill passes, that will actually mean anything.

I’m thinking about my late grandmother, who was a bit vulnerable. If someone—despite her having a sticker—came to her door, she’d probably feel obliged to listen and then we’d probably end up with a vacuum cleaner.

I say that because my good mate Damien O’Connor, in a previous life, was a very, very successful door-to-door vacuum cleaner salesman. I don’t know if the House knows that, but that is why he is such a good communicator, because he could sell ice to the Eskimos. But he would’ve appreciated this law, because it sifts the cowboys from the gentlemen. He is a gentleman, he supports the bill with real life experience, and I support it with him.

Through this bill we’ve learnt a lot about the values of this House. Let it be known and let it be for ever remembered that we, as the Labour Party, are the party that supports small businesses. We are the party that supports tradespeople, we are the party that supports the underdog, and we are the party that will protect consumers every single day no matter where that trade is happening. Whether it’s on their front doorstep or whether it’s in their homes, we will be there to protect them, and this is what this bill will do. It will make sure that people who are vulnerable feel safe in their own houses.

But also this bill will protect our economy going stronger, which I’m always still surprised about. The Opposition keeps telling us that New Zealand is built upon small to medium sized enterprises (SMEs)—and I completely agree. So here is a bill that will protect SMEs, and so therefore there is no hesitancy on this side of the House to support it.

This is also a bill that has shown us that a Labour chair does very well. Thank you to Mr Jamie Strange, who has actually shepherded through almost every single bill that we’ve got in this term, unlike this one, which was done through the last term. So, with that recognition to the Economic Development, Science and Innovation Committee, I commend this bill to the House.

Point of order, Madam Speaker. I just wanted to make sure that we were following the speaking order appropriately, but I believe we are. So I will let you carry on.

Well, I’ll just deal with this point of order, and I would advise Mr van de Molen that that is not a point of order, so I’m looking forward to the next call.

In the short time that the House heard that last speaker in the debate—Naisi Chen—they would be so very disappointed. It was all of 30 seconds on a bill that the Government has said is important and that they want to rush through, but it actually isn’t.

The National Party will be opposing this, not because we don’t believe the intention is correct—in fact, if you look at the work that we did when we were in Government, there was a huge amount here—but it’s because it actually won’t achieve anything at all, and, as with many things that this Government does, it’s big on announcements and very, very light on actual achievement. I say to the members opposite that instead of taking 30 seconds on their call when they have all that time left available to them, why don’t they get into the detail of what the bill actually won’t be doing when they’ve said that they want to achieve so very, very much?

Actually, much of what this bill is trying to do is already covered in law. There are some real challenges when it comes to trading and what can and can’t be done, but, actually, this doesn’t do this. You see, one of the provisions of the legislation says that if you don’t want somebody to come to sell something to you, then you have the ability to tell them not to come to your property. Actually, you already have that under the law, so I don’t know how it is that somebody is safer when it comes to any unfair trade practice as a result of this. Anybody at home that has fallen foul when it comes to this type of selling actually gets no greater protection from this legislation on the day after it has passed and enters into law than on the day before, because vulnerable consumers are already covered by it.

When we were on the Economic Development, Science and Innovation Committee, we had submissions on this from many different organisations and individuals who said that there is an issue here that needs to be dealt with. Many of them recognised the work that was done under the National Government when we made reforms and we focused on these issues, and they said that those had helped and, in some cases, had helped significantly. But the feeling that was left in the committee, at least to those of us on the Opposition side, was one of disappointment because the legislation was not achieving the things that the Government said it will and, at the same time, it doesn’t achieve the things that those submitters said.

Consumer New Zealand said that they supported it but recommended tighter drafting. Well, Consumer New Zealand would have to say that because, actually, if there was anything that would protect the consumer, they’d be in favour of it. But when they say that they want tighter drafting so that the provisions of the bill on entering into law will mean that the people the Government say they want to help actually will get that protection and when the Government doesn’t do that, in effect, what that means is it is a missed opportunity.

We’ve heard a lot over the last four years of this Government about intention, and there would be nobody in the country that would say that they are not well-meaning in their intention. But this bill is a little bit like KiwiBuild. It’s really, really hard for a hard-working Kiwi family to live in a KiwiBuild house that the Government has announced with a press release that will never be built. A vulnerable consumer that needs protection actually won’t be protected just because a Government says they’ve done so when a Government doesn’t do its work properly, and this piece of legislation doesn’t do the Government’s job properly.

We spent a lot of time in committee trying to convince Government members to make the changes that were needed. We were willing participants. Even though we voted against it, we said that we’d like to fix it and we’d like to make it better. We actually want businesses to thrive and strive in New Zealand and we want consumers to be protected, and I’ve got to say that although our meetings are closed to the public when we negotiate these things, I sense that those members of our committee who are in the Government—the Labour Party MPs—wanted to make the changes that consumers had asked them to make, but they were not able to because of some disconnect. I don’t know on what floor of the Beehive the Minister sits, but it feels a long way away from the consumers that were so concerned that they wouldn’t get the protection that they deserved from this legislation.

I’ve got to say that I feel for those Government members of the committee wanting to make change and not being able to. I remember when we were in Government and I was on a committee and Ministers wouldn’t listen, and then I remember when I became a Minister and I was not able to listen always, but the point was that the door was always open. What we always tried to do was make sure that our legislation achieved the lofty goals that the Prime Minister’s press release would promise New Zealanders, and that’s why I feel for these Government members of our committee. They are genuine people, good people, and hard-working, and today they are letting their constituents who are consumers down.

I think there are other speakers in the debate after me. I would love a Government member to explain to us exactly why they think that consumers are better off. Not what the notes say, not what they’ve been given by their research unit—not the things that they read out all of the time. I think that the consumer sitting at home at the moment—

💬 Kieran McAnulty: He’s reading his notes now.

—no, there’s really nothing on this page; believe me—that hopes that with the Government putting this legislation through they will be safer tomorrow than they are today, they deserve a member from the Government to take more than 30 seconds to talk about what it is that they think this bill will do, so that they can be held to account in the future when we look back and say, “Look, in this debate, actually, they promised large, but delivered so very, very small.”

I will say it again: when in Government, we’re very proud of the changes we made to support consumers to make sure that they got the things that they needed, but this Fair Trading Amendment Bill brought forward by this Government doesn’t achieve those sorts of things. It is quite, quite disappointing, and members opposite should hang their heads in shame.

Kia ora, Madam Speaker. I just want to thank Todd McClay, the previous speaker, for the six minutes and 30 seconds of his contribution to this House. That’s almost as much as he contributed to this piece of legislation in the Economic Development, Science and Innovation Committee. We appreciate that.

I am here to support the Fair Trading Amendment Bill as the final speaker of the Government, and I’m proud to stand up and say that this Government is committed to protecting New Zealand businesses, to protecting consumers and all our practices. This bill is here to address, to support, and ensure that we have fair trading and a fair trade in our businesses and our consumers.

I also want to mention living in the beautiful electorate of New Plymouth—yes, New Plymouth. Talking about press statements and—as the previous speaker said—KiwiBuild, well, 18 months ago, there was a press release around KiwiBuild in New Plymouth: 68 houses. The sod was turned about a year ago, and I have to say that 68 families are living in their KiwiBuild homes in Marfell in New Plymouth.

So I’m really proud of this Government’s progress and what they’re doing. I commend this bill to the House.