Motor Vehicle Sales Amendment Bill

Grant Robertson Link to this

It is Thursday morning, but the calendar on the wall says Tuesday morning.

Forever Tuesday morning.

Forever Tuesday. That would make a really good song, I reckon.

I am diverting from the subject. Let me get back to the really serious issue, which is that an excellent process was put in place to make sure that the Act would be capable of being refreshed after the experience of its operation. This bill essentially is an opportunity to refresh the Act.

I think the degree of consultation that occurred—and I pay credit to the officials for that—is indicative of that process. The closing date for submissions was 20 August 2009. We received and considered eight submissions from interested groups and individuals, and we heard two submissions. I pay credit to the Ministry of Consumer Affairs and the committee’s excellent advisers from that ministry for that, and the reason I give credit to them is that if the bill had been controversial, there would have been a lot more interest in it. The fact that they were able to do so much consultation prior to the arrival in Parliament of the Motor Vehicle Sales Amendment Bill—see, I got mention of it in there—is the reason why there was so little controversy or commentary about it.

To deal with the specifics provisions of the bill, which I am sure the Chair is really keen I get on to, one of the issues that the committee managed to do is update the legislation so that it speaks to the modern environment—the electronic environment—that we all operate in. We have recommended that clause 7 be amended to make it clear that the Motor Vehicle Sales Act requires motor vehicle traders to display a consumer information notice when displaying or offering for sale a used motor vehicle physically, or when displaying or offering for sale a used motor vehicle over the Internet when a contract to buy the motor vehicle can be entered into online. That is the critical point that I want to emphasise; it is not a question of having a consumer information notice on every single page where a car is offered for sale on TradeMe, or whatever website people are using, but when people can enter into a contract to buy online, that information needs to be made available. That is really important. Consumers need to have access to that information before they enter into the transaction itself. The purpose of the change that we made to the bill was to distinguish between Internet advertisements that offer the ability to enter into a contract to buy the vehicle online, and therefore should display a consumer information notice, and Internet advertisements that are effectively the same as classified advertisements in local newspapers for which the provision of a consumer information notice would be an unnecessary and onerous requirement. That is a very sensible arrangement that we have entered into.

I personally would not buy a car on the Internet. I have bought other things on TradeMe but I certainly have not bought a car.

What other things?

Grant Robertson Link to this

I think the Chair might rule me out of order if I started talking about the lenses for my lovely Canon SLR camera. We will not talk about photography being my favourite hobby outside this place, either. The point I am making is that the purpose of the legislation is to have a regulatory framework that is fit for purpose, and we have to take into account the new environments within which people make purchases. It took me a long time to feel that I could make a secure purchase on the Internet. I have now managed to do that with DVDs—

DVDs? Don’t try to table them!

Henare Hon Tau Henare Link to this

I will not try to table one as an example, just in case I am told it is not a document. The point is if the wording in our legislation does not match the changes in technology, then it will simply not be able to achieve its purpose. I am very pleased with the changes that have been made to make the Act modern. The previous Labour Government introduced the original legislation. This Government has managed to update it, and I pay tribute to it for doing that.

I also acknowledge the previous Minister of Consumer Affairs, who played a very important role. I compliment her on her presentations to the Commerce Committee. I thought she was excellent. I want to put that on the record, and I think I can rightfully use a bill that she introduced to this House to do so.

Curran CLARE CURRAN (Labour—Dunedin South) Link to this

I want to talk a bit about the comments made by my colleague the Hon Lianne Dalziel about people’s purchasing habits online. Although she may not yet have made her first online car purchase, many, many New Zealanders have. I do not have the statistics to hand but many New Zealanders are purchasing motor vehicles, camera lenses, and other things online. There is a growing trend whereby people are buying and selling houses online, and, as my colleague Carol Beaumont mentioned today, these are major purchases and major decisions in their lives. When people enter into a contract to buy or sell those sorts of items, it is absolutely critical that purchasers in particular can trust the process and trust that they are not being duped. That is one of the reasons why this bill is very important.

I thank all my colleagues on the Commerce Committee for their work on this bill. I also thank Heather Roy, the previous Minister of Consumer Affairs, for her work on the bill and her work generally in that portfolio area. I congratulate the Minister in the chair, the Hon John Boscawen, the incoming Minister of Consumer Affairs, on his new role. I really look forward to hearing his pronouncements and what he has to say on this bill and on future issues concerning consumers.

One of the most important things about this bill is that it is very much a common-sense measure and a step in the right direction. That is why Labour is supporting it. The bill makes some quite important amendments to current law. As members have heard, the bill was initiated under the previous Labour Government. Given New Zealanders’ high proportion of vehicle ownership, the bill will make a difference for many consumers, as other speakers have said. Members on this side of the Chamber certainly care about consumers, and any legislation that protects consumers is important.

As my colleague Lianne Dalziel also mentioned, Labour is perplexed as to why this bill has come up, again, under urgency. I think this is the third time I have spoken on this bill, and every single time I have spoken on it, the House has, I think, been in urgency. Although the bill is obviously tremendously urgent, it seems to have taken quite a long time in between the bits of urgency for it to come back to the House. I am a bit perplexed as to how something can be so urgent yet have a big pause until the next bit. I have been scratching my head about that, given the important issues out there at the moment in terms of the number of New Zealanders who are out of work and the fact that the economy is trying to move out of a very bumpy recession. I would have thought that an important priority of the Government would be to try to create jobs and get people back into work. However, this urgent bill must, somehow, fit into a wider plan that maybe we are not aware of at the moment.

I have been thinking about the last time I spoke on this bill, and I think it is worthwhile mentioning a few points again, given the quite lively discussion that followed. We know that many people are struggling to afford to run a car, let alone considering selling one and buying another, because of the rising costs they are facing as a result of the emissions trading scheme. I am sure the new Minister of Consumer Affairs, the Hon John Boscawen, will have a number of things to say about the fact that those costs are being put on to ordinary consumers, that they are facing rises in GST, and that many of them are losing jobs and struggling to find new ones.

The last time I spoke on this bill, I reflected on the importance of the decision to buy a new car. I reflected on my first decision to buy a car. That car was a 1948 Morris Ten. It was kind of blue with runner boards and those little indicators that flick out. It had a crank thing in it, although I did not have to use it very often. The car’s name was Maurice and he was a great car. I had him for about a year and a half and then I sold him. He cost $125 to buy and I sold him about a year and a half later for $125, which I thought was a pretty good deal.

I asked other members who were speaking on this bill to reflect on their first cars. We on this side of the Chamber have a good outlet through which to express our views and get our thoughts out there. I am referring to our blog, Red Alert. I am sure that a few members have heard of it and might even read it. I mentioned this issue on Red Alert, and there has been an extraordinary number of responses right across the House and out in the community. Some people got quite emotional when they recalled their first cars and the importance of that purchasing decision, which brings me back to the Motor Vehicle Sales Amendment Bill. Consumers need to be protected.

Today I put the same question to the incoming Minister of Consumer Affairs, the Hon John Boscawen. He might like to share with us some of his purchasing decisions about cars. I am sure we would all be really interested to know what his first car was. I think that the decisions people make about important purchases say a lot about them. It would be really interesting to know about other members’ first cars. I wonder what Tony Ryall’s first car was. I know that the Speaker, Dr The Rt Hon Lockwood Smith, takes a great interest in car-purchasing decisions, as I am sure does the presiding officer at the moment, Eric Roy.

I come back to the Motor Vehicle Sales Amendment Bill and its importance. The bill amends the Motor Vehicle Sales Act, which was passed by the previous Labour Government in December 2003. The bill is important because it brings the provisions in that legislation into the 21st century. It makes those consumer protections more transparent, and it makes sure that the new technologies that have emerged since then and are being used in the sales of vehicles are robust. It would be interesting to do a search on TradeMe to see whether there are any 1948 Morris Ten cars for sale. TradeMe is where many people these days are looking for and purchasing vehicles.

The bill introduces a new registration regime for motor vehicle traders, and it also makes them more accountable to consumers. It will also offer some degree of flexibility in terms of participation in the motor vehicle industry. We have heard that the policy that underpins this legislation has several core elements that ensure accountability. They include the requirement for those who trade vehicles to be registered, more disclosure concerning used motor vehicles, and the provision for consumer remedies through the Motor Vehicle Disputes Tribunal. I know that my colleague Carol Beaumont has quite a lot of good thoughts on that. The bill increases the financial limit on the jurisdiction of the Motor Vehicle Disputes Tribunal from $50,000 to $100,000, which is very important, given that consumers have avenues for recourse when it comes to trading. It also intends to reduce the compliance costs.

Hipkins CHRIS HIPKINS (Labour—Rimutaka) Link to this

I will begin by offering my congratulations to the Minister in the chair, John Boscawen. I understand that this is a very significant day for him, because it is the first day that he is sitting in the chair as a Minister presiding over a bill. I also believe, although I have not checked it out, that it is the first day he has spoken in the House when he has not mentioned the emissions trading scheme. I am sure that is still to come. I looked through the Motor Vehicle Sales Amendment Bill, and I could not work out where he might be able to fit it in. We might get through a whole bill where we hear from Mr Boscawen but we do not hear about the emissions trading scheme. I appreciate that this is a very significant day for him.

I also acknowledge the previous Minister of Consumer Affairs, Heather Roy. I am sure that she presided over this legislation very conscientiously and very thoroughly during the time that she was a Minister, as she was well known for doing.

I want to talk primarily about the consumer information notices that are required to be displayed in vehicles. I want to ask some questions either of the Minister or of one of the other members of the Commerce Committee. I have read through the bill, I have gone back to the principal Act, and I have read some of the information provided by the Ministry of Consumer Affairs—I know I am a bit of a geek. It is not particularly easy to follow the impact that this change will make. As I read it, it is about reducing the compliance cost for people who are privately trading in motor vehicles. They will not have to display a consumer information notice as they would if they were registered car dealers.

As I read the principal Act, one of the primary pieces of information supplied in that consumer information notice is a statement that the vehicle is being sold without any finance conditions attached to it. I want to know, either from the Minister or from someone else who is on the select committee, what protections, if any, somebody who trades a vehicle privately has. It could well be that even if a consumer information notice had to be displayed as was required previously, there was no protection in terms of the financing provisions for someone involved in a private vehicle transaction. Maybe someone could purchase a vehicle from somebody else in a private transaction and find that money was still owed on that vehicle by the seller, and therefore the vehicle could be taken off the buyer. I understand from my reading the Act that if a vehicle is purchased from a registered motor vehicle dealer, the dealer has to provide a statement saying there are no financing conditions, and therefore any liability for any previous financing conditions would actually rest with the vehicle dealer rather than with the person who purchases the vehicle. But I want to receive clarification of where people lie in terms of a private transaction in motor vehicle dealing.

I was quite surprised when I looked up the information required on a consumer information notice to find that the notice did not necessarily need to supply all of the information that I thought it would. I had always thought of a consumer information notice being a little thing that hangs in the window of the car when I go to a car dealer to buy a car, and that therefore everything that was on that notice was required by the law. I understand now, having read the information, that that is not the case. Not all of the information supplied on the notice has to be supplied; it is supplied simply for ease of reference by motor vehicle dealers. Some clarification of that from the Minister would be quite useful.

The reason I am particularly interested in the private transactions is that a significant amount of car trading happens over forums like TradeMe or through private vehicle sales, and I think that will increasingly become the case. We are seeing it even in housing sales. People are increasingly trading their houses over the Internet through TradeMe, without any involvement of real estate agents. Increasingly we will see more cars being traded without the involvement of car dealers. We need to make sure that we get this law really clear and that people are clear on their rights and obligations. That is quite important.

While I was listening to Clare Curran speaking before me, I reflected on the number of cars that I have owned. I have owned five cars.

You’re not old enough!

Grant Robertson Link to this

I have owned five cars. My first car was a Mitsubishi Lancer, which was older than I am. It was a 1977 Mitsubishi Lancer; I was born in 1978. I purchased that one privately. The next car that I owned was a Mitsubishi Starion. That was my favourite car.

Are you sponsored by them?

Henare Hon Tau Henare Link to this

Not quite; just hang on a minute. That was also purchased through a private sale. The next car that I owned was a Nissan Terrano. I still own it; that car is good fun.

I’ve got to hear the end of this!

Goodhew Jo Goodhew Link to this

That is right; it is good—it is worth it. I purchased that car from a licensed motor vehicle dealer. The Nissan Terrano is the only car that I have ever purchased from a licensed motor vehicle dealer, and I still own it. I then bought a big Ford Transit van for the last election campaign. I bought it from a private trader, and that was a very unsuccessful transaction. The van had my face painted all over the side of it; the only problem was that it did not go. We had to tow it everywhere, so it was not a particularly useful addition to my election campaign. That van went by the wayside not long after the election campaign.

A non-starter.

Collins Hon Judith Collins Link to this

It was a non-starter, but I still won. I then traded that van down for a little Nissan S-Cargo, which is one of those little bubble cars. It is down in the basement quite often; people will see it down there. The bigger van would not have fitted in the basement, so it was a good trade because it means that I can drive it to work. That was also purchased through a private transaction.

I am probably not atypical of somebody my age: I have owned five cars in the 15 years that I have been driving. I got my driver’s licence when I was 15—16 years actually; I just did the maths, which has never been a strong point for me. Of the five cars that I have owned, four have been purchased through private arrangements. So to some extent the removal of the consumer information notice would have an impact on me. I am willing to throw the comment out there—I have no absolutely no evidence for it, but that is all right; I have not had much evidence for anything else that I have said today—that younger people are probably more likely to purchase motor vehicles in private transactions rather than through motor vehicle dealers. As we go through the debate on this bill, I think we will see that the lower-value vehicles tend to be exchanged through private sales—through classified advertising like TradeMe, or whatever means. People who go to a car yard will typically spend five grand or more. Those who buy a vehicle for 500 bucks will do so through a private sale, and younger people are more likely to be in that category. This legislation is very important for them, as they will maybe be purchasing their first cars. It is important that they are aware of all of their rights and obligations through that process.

I hope the Minister of Consumer Affairs will be able to take a call and clear up what is probably quite a simple matter around these consumer information notices, in terms of what they need to contain and where people are left in respect of previous financing arrangements when there is a private sale of a motor vehicle. Thank you very much.

GRANT ROBERTSON (Labour—Wellington Central) Link to this

I am pleased to be able to take a call on the Motor Vehicle Sales Amendment Bill, and I join with other colleagues in acknowledging the presence of the new Minister in the chair, John Boscawen. I have been waiting for the Minister of Consumer Affairs to tell us what his first car was. Someone cruelly suggested that it was a “Lamington 3000”. I do not know whether that is true, but it would be interesting to hear from the Minister on that.

I also acknowledge my colleague in the Wellington central area, Heather Roy, the previous Minister of Consumer Affairs. I know that she, as a Minister, took that job particularly seriously, including the area of motor vehicle sales, where a lot of consumers make what is perhaps one of their larger purchases. I know that she took her responsibilities seriously, and it is very good to see her back in the House today.

I will focus my first contribution today on a couple of sections in this bill—in particular, new section 40A, to be inserted by clause 12, about the requirements for people to notify the registrar if a new person becomes involved in the management of a company that is selling motor vehicles. On reflection, I think that is something the new Minister might be interested in, in another part of his life, because the requirement is in relation to a new person becoming concerned with the management of a company. The Minister himself has just recently become concerned about the management of an organisation and I am not sure whether he has notified all of the appropriate people about that. But if the Minister were a motor vehicle trader—actually, in the bill it is extended to a licensed car wrecker, and perhaps some people could suggest that Mr Boscawen has been involved in the wrecking and dismantling of something this week, if not a motor vehicle—he would be interested that new section 40A requires that all people who are doing that give notification about their change of arrangements.

The Chairperson will have to indulge me a little on this, but it is relevant; the purchase of the second car I owned had some relevance to this new section. I purchased a particularly poorly running Nissan Sunny station wagon. That was about 20 years ago; I know that the Hon Judith Collins was somewhat alarmed to learn that she had been driving for 5 years longer than Mr Hipkins had been alive. That is probably alarming for all of us, actually, but particularly—

Oh, no—that was legally.

Oh, right. So the member was legal when she was driving. That is excellent, and important to know. I purchased my second car, the Nissan Sunny station wagon, from a used-car salesman in Invercargill. That probably should have been my first warning—that I was both in Invercargill and in the presence of a used-car salesman—not that I am making any reflection on Invercargill—

Roy The CHAIRPERSON (Eric Roy) Link to this

I just caution the member to be relevant to the bill.

Thank you very much, Mr Chairperson. I was in Invercargill purchasing this car, and it was purchased from the father of a friend of mine, who was involved in the firm. Some time had elapsed, and I had to drive from Dunedin to Invercargill with friends to purchase that car. But when I finally got around to purchasing it, the ownership of the dealership had changed and my friend’s father was no longer involved. It would be fair to say that as I drove back from Invercargill to Dunedin—and the Chairperson may be familiar with the part of the road that I am talking about there; there are some quite good straight stretches as one leaves Invercargill—I noticed the car had a distinct wobble. I almost made it to Clinton, which the Chairperson will know well, before we discovered that the crossmember was completely rusted, all the way through. That caused me a bit of drama, but had new section 40A, under clause 12, been in place at that time, I would have at least been able to know there were some changes in the ownership of the company. I think that is important because, as we all know, used-car sales folk rank somewhere about where we do in terms of trustworthiness. In the last survey, politicians were still beating used-car salespeople, but prostitution had moved above us, in terms of being a trusted profession.

It is legal.

That is right; Mr Hipkins seems well informed on that subject. It is important now that we—

He keeps a close eye on what’s legal and what’s not.

—ha, ha—have within this amendment legislation new obligations on people to register a change in ownership. As with all professions, it is important that the motor vehicle sales industry improves its credibility and its performance. Cars are a very important part of people’s purchasing lives, and anything we can do in this bill—and we are doing some good things in this bill to improve that—is great. New section 40A requires people to notify the registrar if a new person becomes concerned in the management of that company.

Later on, in clause 14, it is stated that it is an offence to fail to notify the registrar of a change, and failure to comply with the provision will see the person banned from trading motor vehicles. That is a very strong punishment, and a very good one, because it means that it is an effective tool; people will want to register the changes if they want to carry on being motor vehicle salespeople. I believe that that is a very useful advance in this bill.

I refer back to the process for renewing annual registration, which is provided for in clause 9. Again, this is a balance, as in all consumer legislation, between compliance and the rights and needs of the consumer. In respect of the process that Mr Boscawen will follow as he moves through his time as the Minister of Consumer Affairs in the next 18 months—sadly for him, that time will end next year when the Government changes—I say that it is important that that balance is right. Here in this bill we are making certain new obligations for motor vehicle salespeople—in particular, we are making sure that they register and that they notify any change in the ownership of a company—and there are now penalties in place for not doing that. I think that can be only good for the consumer.

As earlier colleagues have mentioned, a lot of people purchase cars—cars are required by most people in their daily lives—but a lot of the people who are purchasing cars are perhaps not familiar with all aspects of consumer law. Therefore, we need tight protections in this area of consumer law. Someone like Mr Hipkins, who purchased a car when he was about 12 years old, by the sounds of it—

I was 15.

Fenton Darien Fenton Link to this

—he was 15 years old, so that was last year—was obviously somebody who, like a lot of people, would have been in need of greater consumer protection. Young people purchasing what for them is perhaps their major asset at that time need the improved and enhanced rules in relation to motor vehicle sales that we see in the bill in front of us today.

There is within this bill the ability for the registrar to cancel the registrations of motor vehicle salespeople if the registrar is satisfied that their company is one that people should not be buying cars from. But as is good in any consumer legislation, there is another stage in the legislation for motor vehicle salespeople themselves, if they feel they have been hard done by. That route to redress in this bill is by the disputes tribunal; clearly, it is important for that to be covered. I see that the committee, in its process of working through the bill, made some changes in that area. Perhaps a member of the committee, or the Minister, might like to clarify what those were. Essentially, the disputes tribunal has jurisdiction over that matter, and it is important that there is a place where any dispute on such matters can be resolved. As motor vehicle salespeople have a fairly bad name in the community, it is possible that they would want the ability to be able to show to people that they had been unfairly dealt with. Clauses 16 and 17 go through and make clear where people will have to go if they are dealing with the disputes tribunal, what the fines are, and where the process will lead them.

I think the bill in general, and Part 1 in particular, contain some very good things. I am pleased that Mr Boscawen is here. Most vehicles I know of have four wheels; five wheels is perhaps the preferred option for Mr Boscawen and his party, although it was touch-and-go this week as to whether 4 wheels would be viable. But it seems that the spare wheel is back and hopefully will be able to be used frequently, because I think most of us who have driven cars over a period of time know that the spare wheel can sometimes be the most important wheel on a car.

CAROL BEAUMONT (Labour) Link to this

Let me start by taking up the challenge that my colleagues have given the House. I say that my first vehicle was a baby-blue Mini with a fibreglass clubman front.

Blue?

CAROL BEAUMONT Link to this

I know, I know; I was quite young at the time. I have to say that it was a very cute little car. I thought it suited me very well. I look forward to hearing what the honourable Minister John Boscawen’s car was, when he gets up to speak. I acknowledged our new Minister in my previous contribution, but I also acknowledge Heather Roy. It is great to see her back here. That is wonderful.

I will talk specifically about the provisions in the Motor Vehicle Sales Bill about the disputes tribunal. My colleague the Hon Lianne Dalziel went through a bit of the background on process. Although it is fair to say that this has taken quite a long time, it has been a reasonably effective review process. The matters that were raised have been dealt with in this bill. I think it is a very good thing for this House that we have a robust process where we review things, we get people’s input, we then translate that into a bill, and it comes before the House, albeit perhaps somewhat slowly, except for the final bit, which is being forced through under urgency. That seems a little strange.

I will talk specifically about the Motor Vehicle Disputes Tribunal. There are changes in this bill to the jurisdiction of the tribunal and also around decisions being publicly available. The tribunal, established by the Motor Vehicle Sales Act, was brought into effect in December 2003. It can hear claims under the Consumer Guarantees Act, the Fair Trading Act, and the Sale of Goods Act. It can decide claims only when one party is a motor-vehicle trader and the other party is not. Currently, it can decide claims of up to $50,000. This bill amends that by increasing the jurisdiction to $100,000.

I took the time to have a look at what was suggested in the part of the process where the discussion document went out after the review. The review had 12 recommendations. There were two that I could see that related to the tribunal. One was the extension of the jurisdiction that I have just mentioned. The other was the publication of the decisions of the tribunal. Both of those recommendations have been picked up in this bill. I looked with interest at the annual report of the tribunal. I have to say that it looks like the tribunal is a fairly effective body. In the last year the tribunal reported to—the year ending June 2010—it had 266 applications. That number was up on the previous year. I am unclear whether that is because there are more difficulties or because of a greater understanding of the process.

The tribunal reports that 93 percent of all applications heard had a decision issued within 2 months of the date of filing. Ninety-five percent of all applications were heard and a written decision given within 3 months of the date that the application was filed. That seems a reasonable process. What is interesting is that in its annual report it provides examples of cases that in the adjudicator’s opinion required special mention. They are quite interesting. The ones that were raised in the annual report of the Auckland tribunal talked about a car-fair trader. The purchaser was a young Spanish holidaymaker who went to the Auckland Carfair at Ellerslie Racecourse, which is very close to the part of Auckland where I work, the Maungakiekie electorate.

The example was about the car that he purchased and the issues that went on as a result of that. The second example that the tribunal drew attention to was interesting, as well. It was about a faulty transmission in a 6-year-old vehicle that had travelled only 34,000 kilometres. As the daughter of a mechanic, it does seem to me to be a bit out of order that such a thing would happen. That was the second case that the tribunal drew to attention to. The third case considered whether a problem was caused by contaminated diesel or a faulty fuel-injection system.

I think that it is useful for tribunals like this to do that. I am not saying that just to fill up time. It is useful for tribunals to draw to our attention these sorts of cases so that consumers can be informed and that we can look for trends and so on. Interestingly enough, in its annual report, the tribunal made some recommendations for amendments to the Motor Vehicle Sales Act that the adjudicator thinks desirable on the experience of the tribunal. We are looking at amendments to the Motor Vehicle Sales Act in relation to the tribunal. I think this is an example of good practice: that we have a tribunal that is identifying where it finds issues that are worthy of further attention. I think that that is a very good process. In this document I have, it makes recommendations, which I would also like to make, to amend the Act. It concerns section 94(1)(b). It is the provision that requires the tribunal, for the purpose of protecting the public—which should be a fundamental part of consumer legislation—to direct the chief executive of the Ministry of Justice to publish a notice in the Gazette if the tribunal, in determining an application, decides against a motor vehicle trader. This section appears not to impose such requirements on the tribunal when it determines an application against a manufacturer—a manufacturer of a vehicle, as opposed to a trader.

In the last case that I told members about—on whether the problem was with contaminated diesel or a faulty fuel-injection system—the manufacturer was found to have breached the Consumer Guarantees Act. But, because of the wording of section 94(1)(b) of the Motor Vehicle Sales Act, the tribunal was unable to direct the publication of the manufacturer’s name in the Gazette. That may be considered a gap that the Minister of Consumer Affairs may wish to close by amendment.

I was pleased to see that, obviously, ministry officials have briefed the Minister well. In a recent media comment, Mr Boscawen referred to this very matter that was suggested about allowing the manufacturer’s details to be published as well as those of the trader. He has acknowledged the point raised by the tribunal, and I think that is fantastic. This is based on the real world: here is the problem, the problem is identified, and the ministry picks up the issue.

What interests me though, a little, I say to the honourable Minister, is what it says, and I would like the Minister to answer a question on it. It says: “ ‘These issues are being considered as part of the “One Law”review of consumer legislation currently being undertaken by the Ministry of Consumer Affairs,’ Mr Boscawen said.” The One Law—One Door review—which I will talk more about later, everybody will be pleased to know—is a consumer law reform discussion paper, and submissions on it have closed. It is looking at the identification of updates and principle-based legislation, and it is looking at seven pieces of legislation. It specifically does not include the Motor Vehicle Sales Act. I am aware that the tribunal deals with other Acts, as I have just said, dealing with consumer guarantees, fair trading, and the like, but I worry a little bit because at the time of my loan sharks bill the then Minister, Heather Roy, said that some of the concerns we were raising around extortionate interest rates and irresponsible lending would also be covered by the One Law process.

Again, I think that that was a marginal call. It was convenient to be able to say that, so that it looked as though the Government actually cared about this issue—an issue that is harming many in our community. In the area where I live and work, it harms many people. There was evidence recently for those who saw the Campbell Live programme about a young man looking for loans in Onehunga and Panmure who was offered all sorts of interest rates. But going back to the point, at the time, the Minister said that that issue was covered by the One Law review process. I hear now that the new Minister says that this issue around vehicle manufacturers as opposed to traders can also be covered by that.

I am a little worried about what I call review creep. There is a bit of review creep going on here in terms of the consumer law reform process; any issue that is raised in terms of problems for consumer law is somehow, we are told, packaged up in this. When people take time to look at the document, it certainly does not seem immediately clear how the issues of excessive interest rates, in particular, are a central point of it. They were marginal. There was a separate review of that process going on. In looking at in relation to the Motor Vehicle Sales Act I cannot necessarily see how the matter that the Minister has said would be dealt with, will be dealt with. I urge the Minister to answer that question.

IAIN LEES-GALLOWAY (Labour—Palmerston North) Link to this

I know Mr Chairperson had a range of speakers available, so it is a pleasure to have been chosen amongst those options.

Hon Member

A stellar field!

That is right. I add my congratulations to the Minister in the chair, John Boscawen. It is fantastic to see one of the wider class of ’08 promoted to such a prestigious position. Minister Joyce jumped the gun on all of us and got straight into the Cabinet, but I congratulate Mr Boscawen for the achievement of being the second in the class of ’08 to hold a ministerial warrant. It is also fantastic to see Heather Roy in the Chamber. I know that she was a passionate Minister and she was very keen on driving this legislation through the House. She also took her role as Associate Minister of Defence very seriously and as the Opposition’s associate defence spokesperson I enjoyed some of the exchanges we had and some of the opportunities we had to meet on some of the bases. I know that she was very well respected in the Territorial Force and in the wider forces for the role that she played. So it is great to see her here; she is not a spare wheel by any stretch of the imagination and certainly not a retread. It is great to see her in the Chamber.

The Motor Vehicle Sales Amendment Bill is good, solid, technical legislation that will make all New Zealanders better off. Probably everybody at some point in time has to purchase a vehicle, whether it be a new vehicle or a second-hand vehicle, through a licensed trader or just casually, often through TradeMe these days. It is something that most people do, so to know that the rules and the protections around that activity are being tightened up in this way will be important for everybody. Although it will probably sail under the radar, I think that everybody will appreciate the changes.

Members have been reflecting on their first vehicle purchase. Mine was a 1979 Honda Civic, so the vehicle was a little younger than I am. Like Mr Hipkins, I am rapidly approaching my 32nd birthday. I went for a vehicle slightly younger than I was, but I have to say that I learnt a lot about doing bodywork on a vehicle with that car, because it was an absolute rust magnet. How it managed to pass warrants of fitness each time I am not quite sure, but I learnt a lot about how to deal with rust, how to reattach the exhaust pipe, and all that sort of thing, just to make sure it passed the warrant of fitness test each time. If I had had to display any details about that car when I sold it, I think I would have been in a bit of trouble. Nobody would have wanted to purchase it, but that was probably right because it was not too flash by the time I got rid of it. I traded it in, and I really hope that the person who took it off my hands crushed it immediately. It would have been quite easy to crush—

Judith Collins knows.

Judith Collins would have known how to do it. It would have been quite an easy job; there was not a heck of a lot of metal left in it. It was all bogged by the time I had finished with it. Then I was able to get something that was a little bit better. Clearly, if the kinds of protections for consumers in this bill had been around when I got rid of that car, I would have found it very difficult to sell in that environment.

The bill amends the Motor Vehicle Sales Act 2003, which was designed to protect consumers in relation to motor vehicle sales. It is not the most stunning legislation and it will not make the headlines, but people will find it important to know that they have those protections in place. The Commerce Committee noted that it was important to distinguish between Internet advertisements that offer the ability to enter into a contract to buy a vehicle, i.e. a more formal purchasing contract, and the online advertisements that are effectively classified advertisements of the TradeMe style, which is so popular these days. That is a very important distinction to make. We support that distinction. We do not want to make a casual car sale too onerous, with too many hoops, for the person trying to sell a car. That is a good recommendation coming back from the select committee.

I go back to the issue of crushing, and the removal of the requirement for transactions between traders and wreckers to display a consumer information notice. Maybe that is what happened to my 1979 Honda Civic. The purpose here is to display information to consumers; it is not necessary for trader-to-trader or trader-to-wrecker transactions. Again, this provision removes unnecessary compliance costs and makes life easier for traders working in this environment. It is really good to see that the bill increases the financial limit on the jurisdiction of the Motor Vehicle Disputes Tribunal from $50,000 to $100,000. Again, this is an area where I have a little experience—

Aaron Gilmore?

I do not have the kind of experience that members might expect from Aaron Gilmore, as I did not invent the process, nor did I invent the car, and I certainly did not lecture in the field, but I say to Ms Mackey that I will come back to that.

I have been on the receiving end of what I thought was a pretty dodgy transaction from a motor vehicle trader, and we ended up in the disputes tribunal. Luckily my dispute involved a figure small enough to go to the disputes tribunal. I know that there are plenty of people who would prefer to take that option rather than the more formal and complex option of going through the courts to resolve a dispute that would easily fit into this $100,000 realm, so it is great to see that extension. It will make things a lot easier for people who feel as though they have been hard done by. It means that both the trader and the consumer can get a reasonable outcome that determines where the responsibility lay. That is good news for both parties.

This legislation is an improvement on the Motor Vehicle Sales Act 2003. The Act came into force in December 2003 and introduced a new regime for motor vehicle traders, which served to make traders more accountable and offered more flexibility to participate in the industry. New information disclosure requirements for used motor vehicles were introduced back then and the Motor Vehicle Disputes Tribunal was established. It was good legislation that was introduced in response to the needs at the time, and it is great to see this process, which was started, of course, by a Labour Government, finally progressing under this Government. It has taken a bit of time for the Government to get around to it, but it is good to see it progressing now under urgency in a way that will see it concluded in due course. Perhaps it will not be long before we run out of Labour bills and—

Then we’d have another Labour Government.

Yes, by that stage there would probably be another Labour Government, and good legislation that protects consumers’ rights will be back in play and progression on that work will be under way. This bill is good legislation, and I think consumers around New Zealand will be very pleased to see it pass through the House. It has been a pleasure to speak on it.

Mackey MOANA MACKEY (Labour) Link to this

I am so pleased to see that Jo Goodhew is looking forward to my speech. Her expression of joy makes me want to speak for 10 minutes instead of 5. I did not realise how much National members wanted to hear from me.

I was in my office listening to the debate on the Motor Vehicles Sales Amendment Bill and I felt I needed to come down to the Chamber for Minister’s Boscawen’s first piece of legislation. Like other members, I congratulate the Minister on his appointment. But I was a little bit disappointed. When Mr Boscawen was on the backbench he was a lion on many issues, and here he is, the Minister of Consumer Affairs with his first piece of legislation. He has been released on the Chamber. He can say what he wants. He has the power in his hands. What does he do? Nothing. He has been muzzled. He has been curtailed. It is incredibly disappointing.

This bill deals with motor vehicle sales. Motor vehicles produce emissions. Emissions cause climate change. Climate change has resulted in an emissions trading scheme. Mr Boscawen feels very strongly about the emissions trading scheme and about emissions that come from motor vehicles, and this bill was an opportunity for the Minister to take a call. Finally he is in a position to do something about it, but he has not. That is a bit disappointing, but the Committee stage is not over yet, so we do look forward to the Minister taking a call in that regard.

This bill is another piece of legislation that started under the previous Labour Government, as many other pieces of Government legislation have. I wonder when we will stop passing Labour legislation. But if we are going to have a National Government, then I prefer it to be one that passes Labour legislation. So I will not complain about that too much.

This bill is very important. Consumer protection is one of the critical roles of this Parliament, and a vehicle purchase is one of the biggest purchases that New Zealand families will make. I am a case in point as to why we need consumer protection legislation. Everyone has been talking about their first cars. Mine was black and it did not have a cup holder, and that is about all I can tell members about it. My current car is white and it does have a cup holder. Ergo, by the very complex Moana Mackey vehicle-rating system, my current car is better than my previous car. It has a cup holder and my previous car did not. I am one of those people who do not know what to look for. Mr Chair, you do not need to regard me in such a disappointed fashion. I am being honest. I know nothing about cars, except that they are useful and I have to have one, and a cup holder is incredibly important to me personally.

There are other people who may be too ashamed to admit that they did not know the bit of the car that Mr Robertson talked about—the bit that rusted through. I had never heard of it. I did not even know it existed until today. I thank Mr Gary Bates from Gary Bates LMVD in Gisborne, who was incredibly helpful to me when I had to purchase a car. He explained to me that there were probably other functions and attributes of a car beyond the cup holder that I should probably be asking about. When he asked me what I wanted I said “My mother said it has to be white or silver, because I drive a lot, so visibility is important, and it has to have a cup holder. And that is pretty much it.” So he went through the process with me, and this is an example of why consumer protection law is very important.

A car is a major purchase, and many, many people know nothing about vehicles or the questions they should be asking or the problems they should be looking out for. We know what happens in private sales. In our electorate offices we see people who have been burnt by these sales because they did not know the questions to ask—that protection is not in place. That is why it is so important for people to go through licensed dealers, who can make sure that they are getting what they think they are getting and that they are getting value for money.

I have to say that this is one of these bills that I feel if a Labour Government was passing it, then we would be told that we were being too nanny State, that too many rules were in place, and that people should be able to buy a dog of car if they want to. We would be told it is their right as free individuals of this country, that the free market will provide, and the invisible hand of the market will make sure that that the car goes properly. That is not the reality, and there are people out there who will take advantage of ignorance. People are very busy. The often do not have time to do all the things they should and look up all the things they need to know. They do not have time to make sure that they are prepared when they are buying something as important as a car, and that is why it is important to have these protections in place. It is also very pleasing to see the role of the Motor Vehicle Disputes Tribunal beefed up, because tribunals are a much easier way of dealing with things. If we can keep things out of the courts as much as possible it is absolutely desirable—and I say happy birthday to Aaron Gilmore—

The question was put that the amendments set out on Supplementary Order Paper 161 in the name of the Hon John Boscawen to Part 1 be agreed to.

Amendments agreed to.

Part 1 as amended agreed to.

Part 2 agreed to.

Schedule

The question was put that the amendments set out on Supplementary Order Paper 161 in the name of the Hon John Boscawen to the schedule be agreed to.

Amendments agreed to.

Schedule as amended agreed to.

Clauses 1 to 3

CAROL BEAUMONT (Labour) Link to this

It is a great pleasure to stand again and speak on the Motor Vehicle Sales Amendment Bill. I have thought about whether the title is a good title, and I think it is a reasonably accurate reflection of what the bill contains. It is clearly a bill that is designed to amend the existing Motor Vehicle Sales Act, and, generally speaking, the amendments, although positive, are not life-shattering or anything like that. They are all relatively small amendments, so I do not think the bill warrants a grander title than the one it has—the Motor Vehicle Sales Amendment Bill.

As I said, the changes are positive and they follow what has been a reasonable process. The changes are primarily around the renewal of annual registration for motor vehicle traders. There is a very good amendment that closes a loophole that prevented the automatic banning of traders whose registration has lapsed. That is positive. It is not huge in the grand scheme of life, but it is a very positive change. There is the requirement in terms of the consumer information notice, which we have discussed and which my colleague Mr Hipkins outlined so well.

The legislation removes car market operators from the definition of motor vehicle trader. There is the removal of the requirement to display the consumer information notice for transactions between traders or between traders and wreckers, and, of course, the bill increases the jurisdiction of the Motor Vehicles Disputes Tribunal, and there is the ability for the tribunal to publicise its decisions. So there are a number of good, solid amendments to the Act; probably the Motor Vehicle Sales Amendment Bill as a title reflects pretty accurately what it is.

There was a process around that bill, which my colleague the Hon Lianne Dalziel outlined. Of course, the Motor Vehicle Sales Act was good legislation brought in by the previous Labour Government. It put in place things like the disputes tribunal, and it required good, solid consumer information and registration of motor vehicle traders. It was good legislation with pretty chunky requirements. As others have said, motor vehicles are very important in New Zealand life, and for many the most significant purchase they are likely to make.

In the legislative process there was an automatic requirement of a 2-year review, there was a discussion process, and 12 areas were identified, and they carried through into this bill, mainly. As my colleague the Hon Lianne Dalziel said, the bill was considered by the Commerce Committee—a committee that she does an extremely good job of chairing; we are all very proud of the Hon Lianne Dalziel and the work that she does. She is extremely well qualified for that role, with a very incisive mind and a good ability, I think, to deal with the issues.

The process is reflective of what the Motor Vehicle Sales Amendment Bill is called. I thought about whether we could call it something else that would be better than that. Although it is a very accurate reflection of both the process and what is contained in it and its relative importance, it occurred to me that we could call this bill the “Not the Most Important Issue Facing the Country Today Bill”. I think that is a very important point. As we are debating this bill under urgency—a nice, solid bill, as we have all identified—out there people are struggling. They are struggling to make ends meet. Unemployment is at a very high level. There is no approach to bring greater jobs or skills into our economy. So calling the Motor Vehicle Sales Amendment Bill the “Not the Most Important Issue Facing the Country Today Bill” would have been more accurate and reflective of what is going on in the wider community. As I say, people are struggling to make ends meet.

To link that issue to the motor vehicle area, I noticed when my colleague Chris Hipkins, a very fine member of Parliament, gave his first reading speech he talked about the implications of the recession on the motor vehicle industry, and the job losses in that particular industry. He noted that a survey carried out by the Motor Trade Association in January showed that over 200 people in the motor vehicle industry had lost their jobs.

GRANT ROBERTSON (Labour—Wellington Central) Link to this

Thank you very much, Mr Chairperson. Once again it is great to have your enthusiastic support for giving me the call. I will pick up where my colleague Carol Beaumont left off on some potential alternative titles for the Motor Vehicle Sales Amendment Bill. Obviously that title is one option, because the bill amends the Motor Vehicle Sales Act, so that would be traditional.

It’s not very original.

It is not terribly creative, and I think it is important that in this Committee we try to make sure that our laws are contemporary, that they stay in touch with what is happening in the world, and that they are relevant.

One title that I considered was the “Motor Vehicle Sales (ACT Party Shuffling the Deckchairs on the Titanic) Bill”. That is one way of looking at it. Mr Boscawen has found himself in the chair, and—

How many knives could they melt down from a car to put into Heather Roy’s back?

Mr Mallard has a suggestion, which is interesting coming from him, as he has just re-entered the Chamber after having been out of it for some time. Mr Mallard might want to reflect further on that. The ACT Party has obviously reshuffled the deck, and Mr Boscawen has found himself in the chair. He is obviously concerned about consumers—it is in the name of the party—so he is concerned about those who buy and sell motor vehicles.

ACT—consumers and taxpayers?

Yes, that is right.

Surely you can do something—

Ardern Jacinda Ardern Link to this

No, we will come back to that soon. But the “Motor Vehicle Sales (ACT Party Shuffling the Deckchairs on the Titanic) Bill” is one alternative title that we have thought of.

I actually think Ms Beaumont was on to a particularly good point around alternative titles, given that we are yet again here in urgency to debate the Motor Vehicle Sales Amendment Bill, which has been taken through most of its stages under urgency. Perhaps the “Motor Vehicle Sales (Go, Stop, Go, Stop, Go) Amendment Bill” might have been a more appropriate title, because it is hard to understand why a bill that was brought in by the previous Labour Government and was wending its way through its processes—and that National occasionally believes is an urgent bill—occasionally merits the title of urgency, and then stops for a long period of time.

Lada-Ferrari.

Yes, perhaps it is going from being a Ferrari of a bill to a Lada of a bill; we are not getting much in between that from this Government.

The Motor Vehicle Sales Amendment Bill is the title that the Government has come up with. It is probably a fair enough title. Mr Boscawen has been strangely silent during the Committee stage of this debate; he made an early contribution, although signs of life have been rare since then. But I hope that we will hear from him again in the further stages.

Heather Roy would have spoken on it.