Debate resumed from 24 June.
CHRIS HIPKINS (Labour—Rimutaka) Link to this
I am happy to sum up the comments I was making last night on the Motor Vehicle Sales Amendment Bill, and my main point related to the question of priorities. At a time when 1,100 people every week are losing their jobs, the most important thing this Government wants to bring before the House is a bill that reduces the compliance costs for used-car salesmen. That is more important to the Government than a plan to create jobs, it is more important to the Government than a plan to make sure people can pay their mortgages, and it is more important to the Government than any plan to close the wage gap with Australia, which was one of the centrepieces of the National Party’s pre-election rhetoric. Instead, Government members think the most important thing the House should be giving its attention to this afternoon is a bill to reduce the compliance costs for used-car salesmen. As I said last night, that sums up the National Government.
There is a heck of a lot in common between dodgy used-car salesmen and the National’s approach. Dodgy used-car salesmen will tell people whatever they want to hear and make all sorts of false promises in order to make the deal, even if they do not intend to keep any of them after the sale. It is a lot like National’s pre-election rhetoric. National members went around the country making all sorts of promises that they had no intention of keeping. They promised tax cuts and they legislated for tax cuts, under urgency. They then went back into urgency and undid them all. They are a lot like a dodgy used-car salesman. They knowingly gave the public of New Zealand false information about the product they were asking them to buy, with no intention of actually delivering it.
One of the things this bill does is remove the requirement for someone who is privately selling a used car to have a consumer information notice. I think that is probably quite a sensible change, and it is one of the reasons why the Labour Party will support this bill. But is it not interesting that the National Government wants to do away with that requirement? Once again, we can draw an analogy between the consumer information notices on used cars and the National Party’s pledge card at the last election. The reliability of the information is probably about the same. We could not necessarily trust the consumer information notice on somebody’s car to know what we are buying, just like we could not trust the National Party’s pledge card. Three of the promises on its pledge card have already been broken. After only 6 months in Government, three of the National Party’s key pledges at the last election have already been broken. It is kind of symbolic that here we are, doing away with the requirement for someone selling a used car to provide information about exactly what it is he or she is selling, just like the way Government members do not seem to think it is very important that they stick to the promises they made at the last election to the public of New Zealand.
The public voted for National on the promise that a National Government would deliver on those 11 pledges, including the tax cuts, but that was a broken promise. The pledge to cap the number of public servants was a broken promise, because the Government is sacking them. The pledge to keep the age of eligibility for New Zealand superannuation at 65, and increase the amount of superannuation paid to people, is another broken promise.
JO GOODHEW (National—Rangitata) Link to this
It is a pleasure to rise today to speak on the first reading of the Motor Vehicle Sales Amendment Bill. The first thing I would like to do is to thank the Hon Heather Roy for the work she has put into bringing this bill to the House today. But I think it is probably timely that I also acknowledge some of the comments that have been made by the Opposition member who has just resumed his seat. This Government is focused on making business happen in a smarter way, on cutting compliance costs, on making sure loopholes are closed, and on doing things that really matter to New Zealanders.
I will get to those soon. Underpinning the bill is a sense of reducing the compliance costs, closing loopholes—otherwise called “unintended consequences”—and making the law better and smarter. Who can seriously contend that that is not a good thing to do?
This bill is a real priority for this National-led Government, and we are joined with our partner the ACT Party in bringing the bill to the House, after some considerable time has been spent on its genesis. At this time of recession and of having to focus on fiscal prudence, it is important that we display a determination to get rid of unnecessary compliance costs, loopholes, and laws that do not achieve what they set out to achieve, and hence we have this amendment bill.
The purpose of the bill is to amend the Motor Vehicle Sales Act 2003 and to improve its effective operation. The bill is all about promoting and protecting consumers’ interests. It seeks to create an environment that is about informed choice, about confidence, and about being able to do the things one intends to do when they relate to motor vehicles. It makes vehicle traders accountable, and that is truly a worthy purpose of the bill. It also provides consumers with redress through the Motor Vehicle Disputes Tribunal and slightly alters the range of that tribunal. The bill enhances those functions. The Minister, when she introduced this bill, told us that the legislation should be achieving its stated intention, and that there should not be what she described as “unforeseen side effects” or “unintended consequences”. National members certainly agree with her here.
Following a review of the principal Act in 2003 by the Ministry of Consumer Affairs, this amendment bill suggests changes to the registration procedure for motor vehicle traders. The issue is about information disclosure, and again, as I have already said, about the Motor Vehicle Disputes Tribunal. The review of the Act was tabled in the House in March 2006, and more than 3 years later we finally have the opportunity to address the bill and, in doing so, to amend to the Act. Again, I say the core elements of the principal Act are a requirement for those who trade in motor vehicles to be registered, requirements for information disclosure around used motor vehicles, and the provision for consumer redress through the Motor Vehicle Disputes Tribunal.
The bill makes some specific changes to the Act. They include amending the process for traders who are renewing their annual registration. You see, traders have to do that every single year, which is an unnecessary compliance cost for them when there have been no changes to their original registration. So it seems absolutely appropriate that we require those annual statutory declarations as part of registration renewal only when there are changes to the details. There is also a loophole that needs closing, which is about preventing the automatic banning of traders whose registration has lapsed but who are subsequently convicted under the Act for conduct while they were registered.
As well, there is an opportunity to remove the requirement for private sellers at car markets to display a consumer information notice. This is about eliminating unnecessary compliance costs, and that also applies to removing the requirement to display those same notices, the consumer information notices, where the transactions are between traders or between traders and wreckers.
This bill increases the financial limit at which cases will be heard by the Motor Vehicle Disputes Tribunal, and the limit takes quite a substantial rise from $50,000 to $100,000. Another part of the bill allows the tribunal to award costs for the non-attendance of either party to the dispute, and allows the publishing of tribunal decisions. This is all good, smart stuff when it comes to giving consumers confidence, because right now we want anyone who is buying a used car to have consumer confidence and to know that the rules are wrapped around by this legislation. This amendment bill certainly brings them to Parliament for discussion. They are rules that allow consumers to have confidence.
In relation to motor vehicle trader registration, I tell members that at present, after supplying the statutory declaration with the initial application to become a director of a motor vehicle trading company, as I have already said, the director has to keep on supplying an annual declaration. Why would directors need to do that, unless something has changed? That increases costs. What is the purpose? It seems to me that there is no clear purpose for that. It is unnecessary, so in fact it will be dealt to in this bill. The registrar has the information on the register, and it is important that we know that that information is up-to-date and correct. But it is also useful to know that a person does not just have to keep on unnecessarily filling out forms, at a cost to that person or that director. That provision will be useful to those directors who currently live overseas, because they will have reduced compliance costs as a result of this bill.
There is also an issue at present about the fact that people can currently be appointed directors between annual registrations. That can happen without any check on their suitability. Of course, we do not consider that to be suitable, and this bill amends the Act so that when a new director or another person involved in the management of the company is appointed, then that person’s notification has to be accompanied by a statutory declaration. That declaration is about that person’s suitability for registration. Once again, we are talking about consumer confidence, which is very important. It is only a small change, but it really is an additional protection that we believe consumers will welcome.
There is also a loophole in the current Act regarding automatic banning, and it currently prevents the automatic banning of traders from future trading as motor vehicle dealers if those people are unregistered or have lapsed registration at the time of their conviction for certain offences or of their entry into bankruptcy. Currently such people can continue to trade in motor vehicles until the registrar can take a case to court to have them banned. That can actually take some months, comes at a cost to the Government, and of course does not create consumer confidence. Once again, we get back to the issue of consumer confidence. So the bill proposes that those people can be automatically banned, without being registered under the Act, if they meet specific criteria. Those criteria, I am sure, will be discussed at the select committee, but it is proposed in the bill that traders can be banned for convictions for crimes of dishonesty or for a second bankruptcy within 10 years of the first.
Another aspect of the bill is around sales information disclosure, which is about the consumer information notice, or window card, when sales are being made through a car market. These notices display a consumer’s rights when purchasing from a trader, not a private seller. So the bill removes the requirement in respect of private sellers at a car market, as it is confusing for consumers and can result in them thinking they have more rights than they actually do. The bill also removes the requirement to display consumer information notices where transactions are taking place between traders or between traders and wreckers, because that is an unnecessary compliance cost.
In relation to disputes resolution, as I have said, the financial limit for the operation of the tribunal will be increased from $50,000 to $100,000, which reflects the increased value of new and used cars.
I will wind up my address this afternoon by reiterating that the core elements of the bill and the Act should be about the requirement of those who are trading in motor vehicles to be registered, the requirement for information disclosure regarding used motor vehicles, and the provision of consumer redress through the Motor Vehicle Disputes Tribunal. I am sure that this bill will be well debated in the select committee process, and I commend it to the House.
Hon LIANNE DALZIEL (Labour—Christchurch East) Link to this
I listened to that contribution with great interest, but I gained no additional information other than that contained in the explanatory note at the front of the bill. In fact, the speech was a very good reading of the explanatory note of the bill, with a couple of additional pieces of information, and that indicates that the member does not actually understand what the bill does. But that is OK, because I do not either. I do not know why private traders are being asked not to display certificates when they are selling motor vehicles in a market. My understanding in this particular area is that a lot of car dealers are a little bit worried about people being car dealers under the table, and about those people putting their cars into car markets and undertaking work that is not being picked up by the Inland Revenue Department or by the motor vehicle sales legislation. But this bill, as I understand it, is being referred to the Commerce Committee, so we will be receiving submissions, and obviously we will take some advice on it.
I find it fascinating that the Minister of Consumer Affairs, who has held that portfolio for several months now, has given three speeches in her role as Minister of Consumer Affairs. She has given three speeches, and the last one she gave was back in March. I am not including her first reading speech on this bill; that makes four speeches since she has been Minister of Consumer Affairs.
The last speech she made really got to me because it is so relevant to this Motor Vehicle Sales Amendment Bill. The Minister was addressing the Cosmetic, Toiletry and Fragrance Association of New Zealand. Members might ask how that is relevant to this bill, but I assure them that it is. In that speech she said, and she has said the same thing in other speeches: “I am committed to simplifying, rather than increasing, the complexity of consumer law in New Zealand. My test for any existing or proposed legislation is a simple one: does the benefit to the economy as a whole outweigh the total economic cost of the regulations?”. I say that is a very, very good thing and a very structured way of thinking around regulations.
The Minister also stated: “I have directed Ministry staff to commence research on a simplification programme I have called ‘One Law - One Door’. The ‘one law’ refers to a goal of a single, principle-based piece of consumer-supplier legislation to replace the raft of laws dealing with a variety of transaction types and which—in most cases—have been overtaken by marketplace and technological changes.” That is one of these bills. So we will get another bill, later on, after the Minister’s officials have finished doing this work, to replace this Motor Vehicle Sales Amendment Bill and all the other bills—
Hon Darren HughesHon LIANNE DALZIEL Link to this
It does sound cosmetic to me. That is why I wonder why this bill suddenly found its way so far up the Order Paper. I know that my colleague Chris Hipkins, who was speaking earlier, made the point as to why would this suddenly be such an important issue, when the Government is struggling with massive levels of unemployment that are increasing daily. Why would it bring forward the Motor Vehicle Sales Amendment Bill, which, as the previous speaker said herself, was the result of a review that was completed 3 years ago? The Government is rushing into it.
In that wonderful speech made by the Minister she took a quote from the Revlon co-founder and adapted it somewhat: “In our factory we make cosmetics. In the store we sell hope.” Guess how she reviewed that particular phrase. She said: “The same logic is true for politicians: ‘In our Party think-tanks we make policies. In election campaigns we sell hope.’ ” So, finally, we have it out on the table—“selling hope” was all that ACT was doing during the election campaign.
How many commitments were on National’s pledge card? There were 11, but they were personal guarantees. I am just merely saying that on that list of personal guarantees I did not see the Motor Vehicle Sales Amendment Bill. I do not know why, but there we go. It does seem to me there are some issues around the priorities that this Government is applying to this legislation. If the Minister of Consumer Affairs wants to be taken seriously on this matter, one has to wonder why this bill is the first one she has brought before the House as Minister of Consumer Affairs.
Let us look at what the Minister is attempting to do. There is a process in the bill that I think is very, very good. I want to give total credit where credit is due. I always like to do that in this House, and of course I am now going to give credit to the previous Minister of Consumer Affairs, who, in introducing legislation in December 2003, had provided for the Ministry of Consumer Affairs, under a section of the Act, to conduct a review of the Act, following 2 years of its operation.
That is a very good process. I am not saying that 2 years will be the right length of time in any particular issue. It may be that 5 years is an appropriate period; it may be that 10 years will be an appropriate period. It does not really matter what it is. It is the fact that under the legislation itself the ministry was required to conduct a review of the operation of the Act. I say that is a very good model and I think the House should think seriously about adopting that model for a number of regulatory frameworks that it is considering for adoption. The reason I like this particular model, not that I am attached to the time frame that was chosen on this one, is that often Parliament will go ahead with regulatory reform in this kind of area and not know how it will be implemented on the ground. It is a very good matter of practice to bring the legislation back to the ministry, and to review its operation.
Again, in this case the Ministry of Consumer Affairs is to be congratulated on what was a model process. After 2 years of the Act’s operation, the ministry was required to undertake this review. It put out a discussion document, which it developed over a period. It received only 18 submissions on it, which indicates a relative level of comfort with the legislation as originally passed. However, there obviously were issues that were picked up on, and, in fact, there are very minor amendments to the Motor Vehicle Sales Act included in this Motor Vehicle Sales Amendment Bill. I do not think that any of them will require any great analysis, other than this one around the display of the certificate as it relates to private traders and the potential for the impact that it might have on the industry itself. I certainly will be asking questions about that level of detail.
The previous speaker, Jo Goodhew, who, unfortunately is not on the Commerce Committee any more so will not get a chance to ask all the questions that obviously she needed to ask in the circumstances, said that this bill was to remove compliance costs. But then she failed to point out that the bill adds a new requirement for providing information to the Registrar of Motor Vehicles when there are new directors or persons involved in the management of a registered company. Far from removing the annual statutory declaration, it simply allows for one person to make the annual statutory declaration on behalf of all others, in the sense of saying that it would be particularly onerous when there are overseas directors. Therefore, it enables one person to make the declaration on behalf of all others. But there still has to be a declaration, and that point would not have been picked up if someone was relying on that address to determine whether this was—
Hon LIANNE DALZIEL Link to this
Well, I think she was reading from the explanatory note. Mr Hipkins may not have been there when I made that point, but she did read the explanatory note very well.
This is good process and it is good to see the bill before the House, but we do not think it is a very good use of Parliament’s time when there are pressing matters before us, such as an increasing rate of unemployment. We are losing 1,200 jobs a week from our economy, and the Government thinks that the Motor Vehicle Sales Amendment Bill is its top priority.
SUE KEDGLEY (Green) Link to this
The Green Party will be supporting the Motor Vehicle Sales Amendment Bill. As others have said, the bill is fairly minor and makes a series of minor amendments. We support most of the amendments, however, although they are minor. It is a very good idea to increase the consumer redress to the Motor Vehicle Disputes Tribunal from $50,000 to $100,000. That is a very positive move. It makes sense not to require a full-blown motor vehicle trader to make an annual statutory declaration every year.
Most of the other provisions in the bill are perfectly sound and sensible, except for one, which is that the bill removes the requirement for someone who is privately selling a motor vehicle to have to display a consumer information notice. The reason given is that removing the requirement will reduce compliance costs, but I have a consumer information notice here and I cannot imagine the compliance cost of filling out this piece of paper. I think it would take about 5 to 10 minutes of time, so to suggest that compliance costs are the reason for removing the requirement does not stack up. All people have to do is answer questions such as “Is there any money owing on the car?”, “What is the make?”, and “What is the distance the car has travelled?” and give the certificate of fitness expiry date and so on and so forth. The notice asks for very basic information, but, nevertheless, it is information that is important for a consumer who is thinking about purchasing a car.
Consumer information notices provide a small amount of consumer protection. We cannot see why we should remove that consumer protection when a consumer buys a car from a private seller. In fact, we could argue the reverse. When someone buys a car from a private seller, he or she wants even greater consumer protection because, as others have mentioned, we have some very fly-by-night people selling cars. How can a consumer be protected and know that the car he or she is buying meets, at the very least, the requirements of the Consumer Guarantees Act? The Act states that the vehicle must be of acceptable quality, taking into account its age, price, and condition at the time of purchase, etc. At least the Act provides some information and some guarantee for a consumer purchasing a car from a private seller.
We cannot understand the justification for removing that requirement. We do not think this is a major issue, but we think it can be addressed in the select committee. We have no problem with removing the requirement for a consumer information notice when a trader is selling to a wrecker. Interestingly, someone pointed out to me that sometimes car wreckers sell cars. Apparently, people become motor vehicle traders only if they sell six or more cars a year. So if a wrecker sells fewer than six or more cars a year he or she would not have to provide the consumer with information. That needs to be given further thought. We do not think the justifications stack up. However, we support the other minor amendments of this bill, so we will be supporting it. Thank you.
KATRINA SHANKS (National) Link to this
It is my pleasure to stand tonight and speak to the Motor Vehicle Sales Amendment Bill. I say “Hello” to all those commuters in Wellington going home in their cars to the Ōhariu electorate and I thank them for tuning in to Parliament tonight. The purpose of this bill is to amend the Motor Vehicle Sales Act 2003 to improve its workability and transparency. The Motor Vehicle Sales Act promotes and protects consumers’ interests and seeks to create an environment of confidence and informed choice. It makes vehicle traders accountable and provides consumers with redress through the Motor Vehicle Disputes Tribunal.
I was looking at the review of the Act. Section 163 of the Act requires the Minister of Consumer Affairs to conduct a review of the Act following 2 years of its operation, and the review report was tabled in the House on 22 March 2006. This review of the operation of the Motor Vehicle Sales Act gave the basis for the amendments in the bill that we are looking at now and was presented in March 2006, as per the legislation. I was having a read of the review to find out why some of the decisions were made, and I came to an interesting section that I would like to quote. It is from the “Market Context” section of the review. It is slightly out of date, and I apologise to the House for that. The review covers statistics only to 2005, but it puts into context how important the motor vehicle trade is in New Zealand and how big it is.
The review states that “The MVSA is an important piece of consumer legislation as New Zealand has one of the highest rates of car ownership in the world. In June 2004 the total fleet size for New Zealand vehicles was 3,668,577.” Going back 5 years, that is a significant number of vehicles in New Zealand. The review continues: “Car ownership is highest in Auckland at 33 percent of total licensed cars in the country. The second highest is Christchurch and Wellington third at 9 percent.” I apologise again for going back so far in history, but that is when the review was based. It continues: “In 2004, New Zealand Customs reported 236,096 imported motor vehicles to New Zealand: 67 percent were used cars and 33 percent new. There were 815,252 cars sold and 38.35 percent of these were purchased from a motor vehicle trader.” That gives us a feel for the size and volume of car sales we are talking about and how big the motor vehicle trader industry was in New Zealand, and it would have grown.
According to the review, “In the first 11 months of 2005 there were 151,512 used cars imported and 77,375 new cars … Statistics New Zealand reports that in 2003/2004 weekly household expenditure on motor vehicles was $49.20 compared to $37.40 in 2000/2001. The $49.20 includes $44.40 for the purchase of motor vehicles and $4.80 on credit costs, which relate to the purchase of the vehicle.” I will give some final facts, even though I know they are going back to 2004: “In 2004, there were 228,787 first time car registrations on the Motor Vehicle Register. For the first half of 2005 there were 114,908 registrations,”. We know that the registrations have increased significantly since the review, which the legislation was based on. If anybody speaking on the bill after me has some up-to-date statistics, it would be really interesting to hear how much the sector has grown and how important this legislation is when we look at the volumes going through New Zealand. We have one of the highest rates of car ownership in the world. That is pretty significant.
I cannot wait for the bill to get to the select committee process. The motor vehicle industry is going through very hard times and we are in a recession. It is one of the sectors that have been hit the hardest. There are some flow-on effects from the legislation that will affect the sector. I hope when the bill gets to the select committee—hopefully next week—and when we go to our consultation phase we go out very far and wide and touch the motor vehicle industry, individual dealers, and consumers so that we get a good balance coming in and so that the industry is well represented in the select committee process and we can hear their voices. The bill has significant flow-on effects into the sector.
Part of the legislation is good. Some of it is about reducing costs for motor vehicle traders, and by doing that it will be amending the process for traders renewing their annual registration and reducing compliance costs associated with making annual statutory declarations as part of the registration renewal process. That is a good thing. A controversial area will be removing requirements for private sellers at car markets to display a consumer information notice. I know that motor vehicle traders out there who are registered, as Sue Kedgley said previously, have to sell seven cars in a year—
—six or seven to have to be registered to sell vehicles. I know there is a huge market out there on TradeMe, and a huge market for the sellers on the side of the road. Going round and talking to the dealers—and I have spoken to a lot of dealers over the last year—I learnt that one of their biggest concerns in the sector, outside of the recession itself and the impact of it on their sector, is about those who are selling private cars under the table, in effect—dozens at a time on different informal lots around the cities. They are very concerned about that situation and about the impact of TradeMe, with people repeatedly turning over cars on TradeMe and not being registered as motor vehicle traders.
In the bill we are removing the requirement for private sellers at car markets to display a consumer information notice. That places the onus on those who are doing bulk selling under the table to not declare as much as they should be about the cars they are selling. That will be interesting. At the same time we do not want to take away the right of an individual who has a family car and who wants to upgrade to put it on TradeMe or sell it on the side of the road. It will be interesting to get feedback about that issue in the select committee when it comes. The bill also eliminates unnecessary compliance costs by removing the requirement for transactions between traders or between traders and wreckers to display a consumer information notice. Once again, that is reducing compliance costs, which is a good thing for car wreckers. Sue Kedgley, who spoke before me, raised the issue of how some car wreckers will sell over six cars a year, but I suppose we will always get that. We are trying to reduce the compliance cost of those who are genuine traders and who are trading within the law and between each other and not onselling the cars at the end.
The two other things I will talk about are increasing the financial limit at which cases may be heard by the Motor Vehicle Disputes Tribunal from $50,000 to $100,000, which will be fantastic for the consumer, and allowing the tribunal to award costs for non-attendance of either party to the dispute and allowing it to publish its decisions. That will give accountability to the process and a bit of responsibility, because there will be a consequence if either party does not turn up. It will also put a bit of transparency out there for those people who continually break the law. I look forward to the bill coming to the select committee. Thank you very much, Mr Deputy Speaker.
MELISSA LEE (National) Link to this
I rise this afternoon to support the Motor Vehicle Sales Amendment Bill. This bill will amend the Motor Vehicle Sales Act 2003 to improve its workability and transparency. Workability and transparency are good things, but Labour obviously does not seem to understand them.
The Act came into force in December 2003. It introduced a new registration regime for motor vehicle traders, which not only serves to make traders more accountable but also offers more flexibility to participate in the industry. The legislation aims to promote and protect customers’ interests. It seeks to create an environment of confidence within an industry that, I think, earlier today Mr Hipkins referred to as being dodgy second-hand dealers, which is a very bad reputation to have. The legislation makes vehicle traders accountable and provides consumers with redress through the Motor Vehicle Disputes Tribunal.
This bill seeks to enhance all those functions and more, and it is right in line with this Government’s effort to reduce regulatory compliance costs. In these tough economic times it seems prudent that we do so. We are, after all, working against the backdrop of the worst global recession since the 1930s. Helping businesses—who employ people, by the way—by promoting sensible legislation that reduces unnecessary compliance cost is a good thing.
In addition to the initial review of the Act, which was tabled in this House, a discussion paper proposing amendments to the Motor Vehicle Sales Act 2003 was released for wider discussion. The Ministry of Consumer Affairs received 18 submissions on the discussion paper, and an open forum was held involving industry and consumer representative organisations. The motor vehicle industry and consumer groups have been involved in the development of these proposals. This bill suggests changes to the registration of motor vehicle traders, information disclosure, and the Motor Vehicle Disputes Tribunal.
Let us start with motor vehicle sales information disclosure. The Act requires a private seller to display a consumer information notice when selling through a car market. The reverse of this notice displays the consumer’s rights when buying from a trader, not a private seller. Are members confused? Well, this bill will remove that requirement, which can result in consumers thinking that they have more rights than they actually do. This bill also removes the requirement to display a consumer information notice on transactions between traders, or between traders and wreckers. The requirement had no value for either party; it was another unnecessary compliance cost.
In respect of motor vehicle disputes resolution, this bill would increase the financial limit on the jurisdiction of the Motor Vehicle Disputes Tribunal from $50,000 to $100,000, reflecting the increased value of new and used cars. Transparency is important. Changes have been proposed in relation to the disputes tribunal’s reporting clauses to allow all decisions of the disputes tribunal to be made public. The bill provides for costs to be awarded against a trader who does not attend the disputes tribunal hearing without good cause. This bill will close the loophole in the current legislation whereby unregistered traders or those whose registration has lapsed at the time of their conviction or bankruptcy cannot be automatically banned from trading as a motor vehicle dealer in the future.
Perhaps Mr Hughes would like to register himself as a motor vehicle dealer. Currently, such people can continue to trade in motor vehicles until the Registrar of Motor Vehicles can take a case to court to ban them. That takes months and incurs costs to the Government. This bill proposes that a person can be automatically banned without being registered under the Act, if that person meets specific criteria, such as conviction for crimes of dishonesty or a second bankruptcy within 10 years.
The changes to this bill make sense. They protect consumers’ interests, creating an environment of confidence and informed choice. Making vehicle traders accountable is definitely a good thing, and making inroads into this industry to reduce compliance costs is definitely a good thing.
Let us look at the registration of motor vehicle traders. At present, people can be appointed as a director between annual registrations without any checks on their suitability. This bill amends the Act so that when a new director of a company or another person involved in the management of a company is appointed, his or her notification must be accompanied by a statutory declaration of suitability for registration. It is a very small change but it brings with it adequate protection for consumers that unsuitable people are not legally able to become motor vehicle dealers.
This bill also amends the Motor Vehicle Sales Act 2003 registration renewal procedure to allow a company secretary to confirm to the registrar that the information held on the register about the company is correct. This is very useful for overseas directors, who will benefit from reduced compliance costs. The current annual statutory declaration, as part of the registration renewal process, is time consuming, is costly, and serves no purpose if details have not actually changed.
Protecting consumers is a good thing. As a consumer I am sure that I and the rest of New Zealand will be glad that we will have an environment of confidence and informed choice. This bill is a step forward. It removes red tape and compliance costs from the sale of motor vehicles. The National Government is standing by the promise it made before the 2008 election to tackle regulatory impediments, and we are doing that.
This bill is similar to the bill I spoke on last night, the Radio New Zealand Amendment Bill, which mops up—yes, it mops up—what the previous Labour Government failed to do. It did not finish it, and we are mopping up its mess. I commend the Minister of Consumer Affairs, Heather Roy, who must have had a heck of a hard time deciphering and cleaning up the mess that Judith Tizard left behind. I commend this bill to the House. Thank you.
CLARE CURRAN (Labour—Dunedin South) Link to this
I rise to take a call on the Motor Vehicle Sales Amendment Bill. Labour will be supporting this bill to a select committee. The bill amends the Motor Vehicle Sales Act that was passed by the Labour Government in December 2003. The Act sought to introduce a new registration regime for motor vehicle traders and make them more accountable to action, but also to offer some degree of flexibility to participate in the motor vehicle industry. The policy underpinning this Act had several core elements to ensure accountability. These included the requirement for those trading vehicles to be registered, more disclosure concerning used motor vehicles, and the provision for consumer remedy through the Motor Vehicles Disputes Tribunal. Contained within this sensible law reform was the requirement for a review after 2 years; the Ministry of Consumer Affairs completed this review, which was tabled in the House on 22 March 2006.
Although I believe that this bill is important, I ask whether it will address the primary concerns that are facing most New Zealanders right now, and why National is prioritising this bill when the House should be using its valuable time to consider measures to protect New Zealand jobs. The motor vehicle industry has been heavily hit by the recession. Should we not concentrate on jobs for New Zealanders? A survey in January by the Motor Trade Association highlighted that over 200 people had lost their jobs in that industry alone. In Wellington, which mostly I travel to weekly, I see the effects of this recession through the empty lots that were once Williams and Adams. Empty car yards are now appearing in Dunedin, and, I imagine, across the country. A release from the Independent Motor Vehicle Dealers Association has shown that a fifth of New Zealand’s used-car dealers have closed down in the past 6 months.
This bill intends to reduce the compliance costs on traders currently associated with requiring an annual statutory declaration to be made as part of the registration renewal process. But what about dealerships that have already closed down? The recession blues that used-car sales employees are feeling are very concerning. As quoted in the New Zealand Herald of 25 February this year, “Industry groups say the closures, and cutbacks at surviving dealerships, have wiped out at least 10,000 of the 50,000 jobs in the used-car business.” Some have reported that used-car sales are down 44 percent, yet here we are concentrating on amending the industry rather than supporting those who have lost their jobs.
There is no doubt that the economic recession has hit this industry hard. The only doubt that lingers is New Zealanders wondering why the Government does not have a plan to protect New Zealand jobs. The Prime Minister promised back in February that his Job Summit would save or create thousands of jobs, but the evidence is that he has not delivered. The truth is that the Job Summit was little more than a talkfest and a gimmick. Over 1,000 Kiwis a week are joining the dole queue. New Zealanders are crying out for more action from the Government to preserve jobs, but the Prime Minister is not listening. The New Zealand Institute of Economic Research forecast this week that 60,000 Kiwis will lose their jobs over the next 12 months. New Zealand needs focus. It needs fresh ideas and solutions to tackle unemployment, but the National Government does not appear to have any.
Since the Budget the Government has gone silent on preserving and creating jobs. John Key has released 13 statements since Budget day. Just one—the statement on the Green Party’s home insulation fund—was linked to jobs. The Minister of Finance, Bill English, has been even more reticent. One of his two statements dealt with jobs. Ironically, it defends National’s cuts to adult and community education, which will cause hundreds more job losses.
That is right. Last is the Minister for Social Development and Employment, Paula Bennett: none of her three media releases relate to jobs at all. Since the Job Summit 16,000 New Zealanders have joined the dole queue, and 4,000 have joined that queue since the Budget. To date the Job Summit has saved just 345 jobs.
The review that triggered this amendment to the Motor Vehicle Sales Act considered how the registration process, banning provisions, information disclosure process, and Motor Vehicle Disputes Tribunal were operating. The review concluded that some minor changes could be made to reduce unnecessary compliance costs, but that overall the registration aspects of the regime are functioning well. They are functioning well, yet the Government has targeted this legislation in the midst of a global recession. This bill will add a new requirement for providing information to the registrar when new directors or persons are involved in the management of a registered company, and it closes a gap in the present legislation. That is important, as disclosure in the industry has always been a goal for consumers.
The consumer information notice is also updated under this bill. The consumer information notice has been designed to provide information clearly to consumers and for ease of completion by traders. The bill removes the requirement for private sellers to display a consumer information notice at car markets, but traders using car markets will still have to display the notice, which is important. Although car sales are down, there is hope in the industry. Websites such as TradeMe have attracted the more price-conscious buyer. Making use of new technology is very important. The quality of finance companies in the car industry has taken a dramatic turn with the gap left by GE Money and GMAC, which has been only partly filled by other companies. Designing law that protects consumers in relation to motor vehicle sales is important.
As mentioned in the press release of the Minister of Consumer Affairs, the bill is a step toward removing unnecessary red tape and compliance costs from the sale of motor vehicles. But how much red tape will this bill actually cut? That is a very important question for an industry that is struggling, as many other industries are. This Government has promised to tackle some of the so-called regulatory impediments, so I look forward to further discussion on how this bill will achieve that at the select committee.
Although this bill is a start to making informed choices with confidence, there are still further discussions to be had. This bill increases the financial limit on the jurisdiction of the Motor Vehicle Disputes Tribunal from $50,000 to $100,000. That may be important in the luxury car market, where the recession is, in fact, providing bargains. Todd Hunter, General Manager Marketing at Turners Auctions, says that sales of luxury cars are definitely up—some from finance companies and some from repossessions. At a recent auction a 2005 Ferrari with 1,000 kilometres on the clock sold for $250,000. That was down from the original price paid of $640,000. Crikey!
One recommendation from the original review that triggered my attention was the recommendation that consideration be given to amending the inspection powers in sections 124 to 129 of the Motor Vehicle Sales Act to also include the Commerce Commission, in order to allow appropriate enforcement of the information provisions, and that this should be explored in conjunction with work already in progress regarding similar powers under the Fair Trading Act 1986. I hope to discuss this recommendation further at the select committee.
This bill will also allow the Motor Vehicle Disputes Tribunal to award costs for non-attendance of either party at disputes and to publish its decisions, which makes sense, especially in consumer law. As mentioned, the objective of the Motor Vehicle Sales Act 2003 is to promote and protect the interests of consumers in relation to motor vehicle sales. This bill amends the Motor Vehicle Sales Act 2003 and will improve its effective operation. Labour will be supporting this bill to select committee, and I look forward to further discussion on it.
Although this bill amends an Act that is designed to protect consumers in relation to motor vehicle sales, which is important, it has to be said again that it does not address the primary concern of New Zealanders, which is keeping their jobs. It is time that the Government announced initiatives that will protect the jobs of hard-working New Zealanders and initiatives to stimulate the economy and create jobs.
One of the central policies that this Government took to the election was its $1.5 billion pledge to deliver ultra-fast broadband to 75 percent of New Zealanders where they live and work. This policy was central to the National Party’s economic stimulus package. Well, 7 months later we are no further advanced. The Government constantly talks about delays and the need to get it right. It is time that it started showing New Zealanders that it has a plan, that it can deliver jobs, and that it will stimulate the economy and lead us out of the recession. I am not holding my breath.
JONATHAN YOUNG (National—New Plymouth) Link to this
I really enjoyed the Opposition member’s Budget debate, but today we are looking at the Motor Vehicle Sales Amendment Bill. We all love cars; we are a country that loves cars. We are a nation that is filled with long roads, and we enjoy getting in our cars and driving around our nation of New Zealand to enjoy the sights. Most blokes like a car that has reasonable power and looks good and smart. The problem is that we can rush out and buy something, just on a whim, if we have the spare cash. A lot of people go out and buy vehicles and later regret it because they have bought something that is not exactly what they thought it would be. They may have bought the car because it was a good colour, a good shape, or had a powerful engine.
The Motor Vehicle Sales Act 2003 brought regulation and confidence regarding motor vehicle sales into the New Zealand market. There was then a 2-year review, which was completed and reported back to the House in 2006. Here we are, 3 years later, bringing those recommendations to the House as an amendment bill. Although the process has taken a tremendously long time—an amount of time that we think is far too long for a review to be sitting around doing nothing—we are aware that the industry is looking for the review to come into play and to be legislated as an amendment bill so that improvements to the original Act can be seen.
The bill brings a number of changes. It closes a loophole in order to ensure that traders who have been convicted under the Act will receive an automatic ban. That is very important. We need confidence in our nation; we need confidence in order for people to feel that the investment they make in assets that cost a lot of money will be as safe as possible. When people are unscrupulous and have not been banned from having registration, it brings a lack of confidence into the industry. The motor vehicle salespeople who do a fine job and have integrity need to have these amendments in place to enable New Zealanders to have confidence in them. The bill shores up people’s confidence when they realise that a dealer who is registered is a reputable person and can be trusted.
A lot of people just go out and buy a vehicle because they like the colour, shape, or sound of it. Some people might go and kick tyres and look down the line of a vehicle. They might want to negotiate and look at the market to see what is available around the place. But a lot of people do not do that; they see something they like, and if they can be convinced that the best thing for them to do that day is to buy that car, then they might go home owning a car. But it could be a vehicle that has a lot of serious problems later on. When one buys from a registered salesperson one should have confidence in their integrity, and confidence that the salesperson will stand behind his or her product.
Simon BridgesIt does, indeed. The bill ensures a regime whereby there is registration, and when salespeople do not comply with the registration—and, especially, when people are convicted under the Act—they will receive an automatic ban. It is always important, I believe, when people are going to be purchasing a vehicle for them to check out whether they are buying it from somebody reputable.
The bill also removes the requirement for a private seller to display a consumer information notice when selling a vehicle. That might seem a small thing, but it is very important. That consumer information notice usually says that the person selling that vehicle will stand behind it, and he or she is obligated to offer protection to the purchaser. The reality is that a private individual who might at present need to display that notice actually does not have that obligation, so it actually misleads the purchaser. Also, that consumer information notice gives a sense of confidence that motor vehicle salespeople wish people to understand that they offer, and which they offer, of course, at some expense, in terms of backing up the product they sell.
The bill removes car market operators from the definition of “motor vehicle trader”. It increases the financial limit on the jurisdiction of the Motor Vehicle Disputes Tribunal from $50,000 to $100,000. It also amends the annual renewal registration to remove the current requirement for an annual statutory declaration. These measures will bring improvements to the Act. They may not be huge measures, but they will fine-tune and make the Act more usable and more applicable.
One of the things that National has committed to doing as a Government is removing unnecessary regulation and the compliance cost of it. We do that in this amendment bill in order to create an environment that is more financially viable for people who work in the motor vehicle environment.
Confidence is an essential commodity when it comes to trading, and never more so than in times such as these when we are in the midst of a financial recession of proportions not seen since the 1930s. Having confidence in the regulatory regime is critical for the purchaser but also for the seller, as people are more willing to purchase when there is confidence. These amendments, which lift the level of confidence in the industry, will serve both the purchaser and the seller well. Added to that, the bill seeks to put in measures, as I said before, that will reduce regulatory compliance costs.
Changes to the motor vehicle trader registration regulations will benefit the industry. They will benefit the industry with the compliance aspects, and they will bring a reduction in costs. I do not think anybody out there is happy about unnecessary duplication and the cost of it. We want the Government to be more efficient in times of stricture and finance, so if there is unnecessary duplication—and, with that, associated cost—it makes perfect sense to reduce it.
The member will keep the debate going till 6. I thank Trevor very much. When it comes to purchasing a vehicle—especially a second-hand, used, or, as many people say, a pre-loved vehicle—people purchase a vehicle for many, many different reasons. Truly discerning buyers show no emotion, exude no trust, are disinterested, and will probably look down the side of the vehicle. When they become interested it will be by stealth. They will check through all the other dealers within a 300 kilometre radius to see what prices and mileage the other cars have. When they eventually return to the original salesperson they will have the engine checked by an independent person. They will probably walk away for another day, maybe 2 days, perhaps even a week, and go cold on the deal because there are another thousand deals to look at. It is a bit of a game.
Hon Simon PowerThe sad ending is that, probably like many other members of the House here, I have bought and sold many vehicles, and I have had my share of vehicles, which I will not tell stories about, lest I embarrass myself.
I will tell members what the best car that I had was. The best car that I purchased, and the one I loved the most, cost me the most, because I did not buy it prudently. I did not buy it in such a way that I had confidence in the person who sold it to me. Unfortunately, the actual cost of the vehicle was the lowest cost.
Mr DEPUTY SPEAKER Link to this
I am sorry to interrupt the member. I am sure we would all like to hear the rest of that story. Is the car still running?
Hon TREVOR MALLARD (Labour—Hutt South) Link to this
I hope members will forgive me for following on in a slightly personal manner. Last week I was sitting here with Doug Graham on my right and hearing Kennedy Graham speak from the end of the Chamber.
Hon TREVOR MALLARD Link to this
Frankly, that is exactly right. One would have sworn from one’s experience that it was Doug Graham who was speaking. They were saying more or less the same thing, and their voices were indivisible. But in this particular case, at midpoint in Jonathan Young’s speech, my eyes started to drift somewhat and I went back 25 years. It could have been his father speaking. His father was a member of Parliament when I was first a member of Parliament. His voice was very similar. I think his father had slightly more enthusiasm later in his career than Jonathan has now, but it was the same solid, tradesman-like “we will get through this speech” type of approach. I congratulate the member because—to make a serious comment—I think Venn Young was one of the institutions in this Parliament and someone whose integrity and solidness were well known. I was then going to work on the segue into talking about Jim Bolger and his wonderful comments yesterday about wide boys and flash financial people who lose millions of dollars, or billions of dollars, for countries around the world. There is a parallel between the image of the used-car salesmen of the past, and some of them currently, and the image the world has now of the people who have been leading the financial markets around the world.
Jim Bolger made comments to, and about, Mark Weldon, as someone who criticised the State-owned enterprises and said in a speech made on behalf of the Prime Minister that they should be privatised. Jim Bolger gave Mark Weldon his beans. From my understanding of what happened, Jim Bolger was absolutely right. The idea that John Key’s policy of privatising, over a 2 to 5-year period, the State-owned enterprises—as Mark Weldon said yesterday at a meeting with Treasury on behalf of John Key—is reminiscent of some of the things that the old-fashioned, snake-oiled car salespeople used to say.
I have one final comment in this area for the member for Tauranga. I ask him whether his favourite car is a Mercury—a Mercury Cougar.