David Cunliffe today gave a speech to the New Zealand Initiative, an economics think tank. The talk outlines the Labour Party’s economic policy. It displays so much economic confusion that it will take several posts to get through it all. Today I want to identify a fundamental conflict between Labour’s economic goal and its proposed monetary policy.
Mr Cunliffe begins his speech by saying that New Zealand businesses produce too much low value stuff. Labour wants to “support New Zealand business in the journey from volume to value”. He then claimed that “the biggest obstacle to our exporting businesses is the consistently over-valued and volatile exchange rate. Labour has long signalled it will review monetary policy to ensure our dollar is more fairly valued to help business and lower our external balance”.
A devalued dollar helps exporters sell more overseas by reducing the price foreigners pay for our goods. For example, if the NZ dollar fell from US$0.85 US$ 0.70, what an American pays for a NZ$1,000 widget would fall from US$850 to US$700. So Americans would buy more of those NZ made widgets. But, of course, the value of those widget sales would have fallen. The reduced exchange rate increases the volume of what we sell overseas by decreasing its value – the exact opposite of Mr Cunliffe’s goal.
Such confusion would be funny, if only there weren’t a chance, however small, that these people will get a chance to act on their ideas.
No law to set the price of broadband over Chorus copper
As RT reported weeks ago, legislation to overturn the Commerce Commission’s decision on the wholesale price of broadband over Chorus’s copper telecommunications network was never likely, for the reasons outlined then. In truth, the Nats were already focused on a contractual fix with Chorus. That said, the media stunt with scheduled press releases from the other political parties gave John Banks the opportunity to express publicly what had been conveyed to the Nats weeks ago in private: that ACT would not support legislation to quash a decision of the independent regulator.
UFB - one bad idea leads to another
As Chorus is discovering, partnering with Government on a technology project is a risk to shareholders. Of course Chorus had little option in the circumstances. The Nats simply announced an election policy that they were building an Ultra fast fibre broadband network. This had the potential to make Chorus’s business worthless if they did not jump into bed with government to access taxpayers’ money. One bad public policy choice resulting from the desire to look visionary in an election campaign, now results in further bad public policy choices.
In other technology news, the next stage of the ebench project to provide near paperless records for the judges in the Courts is on permanent hold. Again no surprise: big-bang technology projects involving government nearly always fail.
Drill baby drill: Greenpeace gives up
The Greenpeace flotilla so ably lead by Co-Skipper McDiamid of the Vega headed back to port and Greenpeace went off to Court in a bid to use the law to stop deep-sea oil prospecting. Getting in close proximity to the prospecting vessel the Noble Bob Douglas had failed to have any effect. Greenpeace is a global corporate - it sets out to get earned media that can then be replayed in the English speaking world over the news cycle. Emotion drives up donations to fund the national campaigns and HQ in Amsterdam. That’s why Greenpeace activists abseil off buildings; occupy structures with oversized signs and enjoy being safely manhandled by authorities; it makes for great television. Young journos love it too. They are sympathetic (who can be against the environment) and they get the footage. Greenpeace needed to stop the prospecting or get an OTT response from the Government. They achieved neither. Turning out activists to stand on beaches simply won’t play globally. And seeking a judicial review in the New Zealand Courts is not as fruitful as being the subject of Russian justice.
Flexi-super is poor policy and misses the point
ACT is not that keen on Peter Dunne’s idea of flexi-super which allows retirees to take a lower payment sooner than 65 or a higher payment if they retire later at 70yrs. ACT thinks the policy misses the point: the current scheme is unsustainable. Geoff Rashbrooke of the Victoria University’s Institute for Governance and Policy Studies has done the numbers in a new working paper. He makes three observations about flexi-super: first there is no individual pot of money, New Zealand superannuation is a generous welfare benefit not an annuity. Second he thinks the discounted rate of payment proposed is about right. However the bonus for late retirement at 70 is too generous. Third he observes that opting for a lower payout earlier through poverty is not much of a choice. He concludes his paper by saying that he was surprised the policy was ever taken seriously.
From hero to zero by word of mouth
Despite the boosting by the editorial writer of the NZ Herald who declared the CCCP to be without taint, the rest of media and other politicians including the PM have been having fun with Colin Craig. There appears to be no end to his willingness to express his views on the broadest range of topics. The CCCP is really all about him.
Watch John Banks on the campaign trail in Christchurch East with ACT candidate Gareth Veale yesterday on the subject of Mr Craig – it is classic.
Steady hand on the tiller award
The steady hand on the tiller award of the week goes to Energy Minister Simon Bridges who made sure Greenpeace did not get the video footage they wanted.
Elvis has left the building award
The Elvis has left the building award of the week goes to Colin Craig who is learning that the easy bit of being the NZ Herald’s kingmaker is now over.
ACT Commerce Spokesman Chris Simmons today described the Energy Efficiency and Conservation Authority’s proposal to implement Minimum Energy Performance Standards as blatant nanny statism – reminiscent of Labour’s shower head regulation and light bulb bans – and questioned whether the Authority was providing value for taxpayer money.
“A major reason for Labour being booted out of office was because New Zealanders were sick of being told how much water to use during their shower and what type of light bulb to buy. Now we have EECA proposing to tell people how much power their computer can use. This is the nanny state at its most ridiculous,” Mr Simmons said.
“ACT is all for voluntary energy efficiency labelling – consumers should be free to choose the most energy efficient computer from the range of what is available on the market. But for politicians to actively stop people from buying the computer, laptop, or monitor that they choose is bureaucracy gone mad.
“Even more concerning is that the EECA – made a standalone Crown Entity by Labour in 2000 – spends $146 million every year promoting feel good initiatives like this. The announcement raises serious questions about whether the Authority is a sensible use of taxpayers’ money.
“We are kidding ourselves if we think that the decisions of bureaucrats in New Zealand are going to affect how global technology companies design their computers. Instead of creating more energy efficient computers, Performance Standards will simply drive technology away from New Zealand and remove choice from consumers. This proposal from EECA hardly seems like money well spent,” Mr Simmons said.
Minister of Consumer Affairs John Boscawen was today pleased to announce that the Consumer Law Reform Bill has been approved by Cabinet and will be tabled in Parliament for consideration when the House reconvenes early next month.
"ACT and National in Government are committed to ensuring that New Zealand consumer law is effective and workable. The Consumer Law Reform Bill delivers on that commitment," Mr Boscawen said.
"This Bill represents the most significant changes to New Zealand's consumer laws in more than 20 years. It will bring much-needed clarity in an era of online shopping, extended warranties and self-checkouts. It will strengthen consumers' rights and simplify business compliance by replacing seven existing consumer laws with updated Consumer Guarantees, Fair Trading, and Weights and Measures Acts - as well as a new Auctioneers Act that sets a licensing regime for auctioneers.
"Some of the key changes include: extending the Disputes Tribunal's jurisdiction to cover complaints about misleading and deceptive conduct; subjecting all new goods sold via auctions - and all goods sold by professional traders through online auction sites - to the acceptable quality provisions of the Consumer Guarantees Act; prohibiting unsubstantiated claims and requiring traders and retailers to ensure their claims are valid; and reconsidering how the Consumer Guarantees Act could apply to electricity and carrier services.
"The Consumer Law Reform will reduce costs and confusion, and make it easier for consumers and businesses to understand their rights and obligations.
"Strong and relevant consumer legislation is important for both consumers and businesses. These changes will allow consumers to shop with greater confidence and, for business, will help to create a level playing field where reputable suppliers are protected from the inappropriate market conduct of unscrupulous competitors," Mr Boscawen said.
Minister of Consumer Affairs John Boscawen today launched Scam Awareness Week 2011 – a joint annual initiative run by the Ministry of Consumer Affairs, as part of an Australasian Consumer Fraud Taskforce (ACFT) campaign, and focused on raising awareness of scams in the community.
“According to research commissioned by the Ministry of Consumer Affairs, New Zealanders greatly underestimate the cost of scams. Of 1,000 people surveyed, 90 percent believed New Zealanders lose under $300 million a year – but the cost is closer to $450 million per year,” Mr Boscawen said.
“Added to this is the immense emotional cost to scam victims. The Ministry’s Scamwatch website (www.scamwatch.govt.nz) receives around 3,500 reports annually, including from people who have lost everything – their home, their savings, etc – by falling victim to a scam.
“The Ministry’s research also showed that most New Zealanders believe that scams originate in Africa in and Asia when, in fact, scammers can be based anywhere in the world – it’s incredibly easy for a scammer to set up a fake email address and then claim they are in London, or to phone and claim they’re in Sydney, when they’re actually somewhere else entirely.
“Recent scams that the Ministry has issued alerts on include rental property scams, computer cold-calling scams, tax back scams, and charity scams that arose in the wake of the Christchurch earthquake. Anyone who comes across these, or other scams, is encouraged to report them to Scamwatch in order to help others avoid falling victim.
“Scammers rely, and prey, on human vulnerabilities and money sent overseas is virtually impossible to recover. New Zealanders need to stay on their guard and remember the old message: if something seems too good to be true, then it probably is,” Mr Boscawen said.
Yesterday was the deadline for financial advisers to join a free dispute resolution scheme, meaning that consumers and small businesses can get independent assistance if they have a dispute with a financial service provider, Minister of Consumer Affairs John Boscawen said today.
“This was the final stage of the implementation of the Financial Service Providers Dispute Resolution regime that began in December and covers banks, insurance companies, financial advisers, finance companies, brokers, money managers and KiwiSaver providers,” Mr Boscawen said.
“Prior to this regime only banks and insurance companies had an independent body to hear complaints. Now anyone handling New Zealanders’ money must be registered and be part of one of four free dispute resolution schemes – the Insurance & Savings Ombudsman, the Banking Ombudsman, the Financial Dispute Resolution, and Financial Services Complaints Limited (FSCL).
“These services cover all aspects of the financial services industry and provide consumers and small businesses with an avenue to seek resolution should a dispute arise with any kind of financial service provider.
“Consumers need confidence when transacting in the marketplace – and especially when dealing in financial matters. Access to free and independent disputes resolution will ensure that high standards are maintained in the financial industry, and will give consumers confidence that they will be treated fairly where a dispute arises,” Mr Boscawen said.
For more information about dispute resolution services, visit http://www.consumeraffairs.govt.nz/for-consumers/how-to-complain.
Minister of Consumer Affairs John Boscawen today announced that a Consumer Law Reform Bill to strengthen consumers' rights and simplify business compliance will be introduced to Parliament later this year.
"The Consumer Law Reform Bill represents the most significant changes to consumer laws in more than two decades and brings much-needed clarity in an era of online shopping, extended warranties and self-checkouts," Mr Boscawen said.
"Under the Consumer Law Reform, seven existing consumer laws will be replaced by updated and more understandable Consumer Guarantees, Fair Trading, and the Weights and Measures Acts.
"Some of the key changes include:
- The Disputes Tribunal jurisdiction will be extended to cover complaints about misleading and deceptive conduct.
- New goods sold via auctions - and all goods sold via online auction sites - will be subject to the acceptable quality provisions of the Consumer Guarantees Act.
- A prohibition on making unsubstantiated claims will require trader and retailers to take steps to ensure their claims are valid.
- Rules surrounding direct sales, such as door-to-door or telemarketing sales, will apply to all types of transactions, including cash or credit. This used to apply to credit agreements only.
- Auctioneers will have to be registered and will have to meet a number of minimum standards, included accounting for the proceeds of an auction, displaying their licence and complying with the law.
- Carrier services, such as couriers, will be subject to the Consumer Guarantees Act.
"These changes will reduce costs and confusion, and make it easier for consumers and businesses to understand their rights and obligations.
"The Bill will also strengthen the enforcement powers of Government agencies, allowing faster and more effective action to remove unsafe products from the market. It will give courts new powers to ban individuals who repeatedly breach consumer laws.
"Strong and relevant consumer legislation is important for both consumers and businesses. These changes will allow consumers to shop with greater confidence and, for businesses, will help to create a level-playing field where reputable suppliers are protected from the inappropriate market conduct of competitors.
"National and ACT in Government are committed to ensuring that New Zealand has effective, workable consumer laws, and removing those that are no longer relevant or useful. The Consumer Law Reform is part of the Regulatory Reform Agenda, and we hope the changes it implements will be in place by the end of the year following consideration by Parliament," Mr Boscawen said.
For more information on the Consumer Law Reform visit www.consumeraffairs.govt.nz/legislation-policy/policy-development/consumer-law-reform.
Hon John Boscawen speech to launch Consumer Rights Day; Pataka Museum of Arts and Cultures, Norrie Street, Porirua; Tuesday, November 30 2010.
Good morning ladies and gentlemen, it's great to be here. I'd like to begin by extending a warm welcome to everyone who was made the effort to be here today - it's great to see how many agencies are represented here today to demonstrate what they can do for the community.
I'm very pleased to be here today to formally open this Consumer Rights Day. In fact, I believe this to be such a worthwhile event that I have encouraged the Ministry of Consumer Affairs to consider holding more days like this around the country.
The Ministry of Consumer Affairs aims to ensure that consumers can have confidence in the marketplace, and my Ministry appreciates the support and networks you provide in your communities.
In order to have confidence in the marketplace, consumers need to be able to access enough quality information to enable them to make the decisions that are right for them. They also need to know that there are ways to resolve any disputes they might have should a problem arise.
I'm pleased to say that we're not doing too badly on that front. Last year's National Consumer Survey found that New Zealanders generally have a fairly good understanding of their consumer rights and that many are aware of their right to have faulty goods repaired, replaced or refunded.
The was commissioned by the Ministry of Consumer Affairs and also indicated a generally strong level of consumer confidence throughout New Zealand - with most consumers believing that the current law will protect them if they encounter a problem with a transaction.
That same survey, however, also showed that 16 percent of respondents couldn't name a single organisation or service that could help them when things went wrong. Clearly, there is still work to do if we are to ensure that people know where to turn for assistance or advice.
It is on these people that I want to focus; the people who don't get their problems resolved for the simple reason that they're either unaware of the protections exist for them, or they don't know where to turn to for help.
In fact, it is the latter - the knowing where to turn for assistance - that can prove the biggest stumbling block for people trying to get their problem sorted.
Around the room today I see representatives from agencies and organisations that listen to consumers and help them with their complaints. Even better, many of these services are free for the consumer.
But there are around 20 statutory, Government and self-regulatory entities that have disputes resolution and/or investigation and enforcement roles - and it isn't always easy for people to find the one that is suitable for their specific complaint.
Not only that, but having to explain their complaint or understand the process they must follow, can be very daunting for consumers. After all, while some people are confident enough to negotiate the process themselves, there are others who need support to get their complaint and heard.
These are the people who often fall through the gaps, and that's why the role of community groups and agencies are so vital - you fill the gaps by guiding people through the processes and procedures, encouraging them to get their evidence together, so they can get their problem solved.
As you do this important work, the Government is working to make our consumer laws easier to use and understand. Seven consumer laws are currently being reviewed - the objective being to have principles-based consumer law, and simplification and consolidation of existing laws.
The Ministry of Consumer Affairs released a discussion document on Consumer Law Reform earlier this year. Submissions on this document are currently being considered with the aim of ensuring the law is relevant today and will continue to be relevant into the future.
We are also making progress on the review of the Credit Contracts and Consumer Finance Act (CCCFA). This looks at addressing issues around hardship, fees, unsolicited credit, disclosure, repossession and pawn-broking.
From tomorrow, new laws for financial service providers mean there are dispute resolution schemes that people can go to if they have a problem with creditors and other financial service providers.
But making sure that consumer laws are effective, and that complaints processes work properly, means little if consumers do not first know about them or understand how to use them properly - because complaints can't be investigated or dealt with if they don't reach the right people or agency.
The Government wants to make it easier for consumers to complain, and to find the appropriate avenue and organisation to help them. But we also admit that it can sometimes be difficult to reach every person who is in need of help.
And that's what Consumer Rights Day is all about - it's about Government working with community groups and agencies to help consumers to know their rights and where to turn if things go wrong.
We here in this room have a common goal: to ensure that consumers are able to find out about the rights that protect them, and the services and channels they can use to solve a problem. We all want to create and empower confident consumers in New Zealand.
I have no doubt that, together, we can achieve that goal. I'd like to thank all the agencies here for their ongoing supporting, and for the fantastic work you have done and continue to do. My staff and I look forward to working with you all in the future so that, together, we can help your communities.
Hon John Boscawen speech to the Disputes Tribunal Referees Forum; The Holiday Inn, Featherston Street, Wellington; Friday, November 5 2010
Good afternoon ladies and gentlemen and thank you, Brent [Smallbone, Wellington Referee], for the introduction. I'm very pleased to be here to talk to you today.
I'd like to begin by formally acknowledging the valuable work that the Disputes Tribunal does to provide consumers and traders with accessible justice, and I especially want to recognise the Referees and the staff who support you.
Consumer complaints are the most common type of legal complaint in New Zealand, and the Disputes Tribunals are the main avenue for resolving consumer grievances. As Referees, your job is to ensure that people are not excluded from the justice system simply because their dispute may be at the smaller end of the scale; fairness is fairness - no matter what the degree - and you do valuable work by helping to resolve disputes in a low cost, effective and approachable manner.
Over recent years this work has been enhanced, with Judge Spiller having overseen a number of significant steps forward for the Disputes Tribunal - particularly the raising of the level of claims that can be heard by the Tribunal from $7,500 to $15,000. This change improves access to quick resolution of disputes and redress for consumers and businesses whose claims have previously been outside the Disputes Tribunal limits.
Another initiative is the publishing of cases that Referees have identified as being of particular public interest - a move that is aligned with international best practice, and also helps improve public awareness of the Tribunal.
I understand that Principal Disputes Referee Judge Spiller has recently handed over the reins to Anne Darroch. I am sure that, with Anne at the helm, the momentum to improve the Disputes Tribunal processes will continue and that her extensive experience as a Referee will stand her in good stead to navigate the exciting times ahead.
As Minister of Consumer Affairs I continue to support the vision of consumers transacting with confidence and being able to rely on representations made to them about goods and services.
I have strong views on people taking advantage of others and do not want to see people being conned or experiencing harsh and unconscionable conduct. Sadly, far too many New Zealanders have a low level of financial literacy, and the behaviour I have just mentioned is sometimes experienced by people who are less sophisticated or experienced in financial matters. I'm sure that everyone here has, at some time or another, come across someone who for this very reason has found themselves in a difficult and distressing situation.
Financial literacy is a personal interest of mine and I hope to make a positive contribution to improving New Zealanders' levels of knowledge.
The focus of this session today is the Consumer Law Reform, which is the top priority for my portfolio and is currently being progressed by the Ministry of Consumer Affairs.
Having strong and relevant consumer legislation is vital for both consumers and businesses.
For consumers, such legislation provides confidence and successful participation in the marketplace - subsequently allowing them to contribute to a productive and innovative economy. For businesses, effective consumer laws help to create a competitive business environment where reputable suppliers are protected from the inappropriate market conduct of competitors.
The primary objective of the Consumer Law Reform is to implement principles-based consumer law that achieves these aims for consumers and businesses. It is this goal that drives the Consumer Law Reform project currently under progression and why the Ministry of Consumer Affairs and I are considering various improvements and enhancements to our fundamental consumer legislation - the Fair Trading Act (FTA), the Consumer Guarantees Act and the Weights and Measures Act - even though they have stood the test of time well.
Additional objectives are that the legislation is: up to date; relevant now and into the future; aligns, where appropriate, with international best practice; and, most importantly for the Disputes Tribunal, is easily accessible to those who are affected by it and is effective and enforceable. As such, the Ministry is working hard on proposals to enhance and futureproof the legislation.
Key proposals the Ministry is considering are the introduction of prohibitions of unfair terms in consumer contracts, of unconscionable conduct, and of unsubstantiated claims. These proposals mirror those available in Australia under its Australian Consumer Law - while consistent law between our two countries is not an aim on its own, it is certainly one thing to consider in reviewing whether we proceed down these paths. Likewise, it is important to ensure the benefits that any changes in the law exceed the costs.
Also of interest to you may be proposals around the application of the Consumer Guarantees Act to online auctions - which, over the past few years, have significantly increased in number - and to the Carriage of Goods Act.
As you will probably be aware, the Government earlier this year released the Consumer Law Reform discussion document and invited submissions on the proposals it outlined. The proposals drew mixed reactions and generated 113 submissions from individuals and organisations - all of which the Ministry is taking into account.
Among those submissions was one from Judge Spiller, on behalf of the Disputes Tribunal, which proposed that the Tribunal jurisdiction be extended to include section 9 of the Fair Trading Act - which prohibits misleading and deceptive conduct.
Historically, only judges had the authority to rule on Section 9 cases. The calibre of referees in this room makes a strong argument for extending Disputes Tribunal Referees' jurisdiction to include Section 9. I welcome the opportunity to further explore this proposal which, I see, has benefits for consumers.
I envision decisions on the Consumer Law Reform being taken in December. This is in advance of the original timetable and would mean that legislation could be introduced to the House early next year.
Many of the proposals would have an effect on the types of cases you hear, and would open up the Tribunal to a wider range of disputes. I am sure that, once the Government has made its decisions, you will all be able to meet the challenges and opportunities that this would provide.
Once again I wish to acknowledge and commend your contribution to providing such a valuable and valued service, and I wish Anne all the best in her new role.