Evelyn Cole Manager, Consumer Policy Ministry for Consumer Affairs, New Zealand

Evelyn Cole Manager, Consumer Policy Ministry for Consumer Affairs, New Zealand

Social, Economic, Cultural and Political Challenges - a New Zealand perspective

Some Background on New Zealand 4,027,974 people live in New Zealand Median age of New Zealanders is 35.9 years Average life expectancy 77.5 years males; 81.7 years females Average household size 2-7 people 66.9% of dwellings either owned or held in family trust Predominantly European background population, with large numbers of Maōri and Pacific Island background population; and over the next 20 years significant growth in the Asian background population expected

Personal and Household incomes $50,001- $100,000 8% $100,001 or More 2% Zero Not Stated Loss Income 11% 1% 4% $1 - $15,000 34% Not Stated 18% $100,001 or More 9% $1 - $15,000 12% $15,001- $30,000 19% $30,001- $50,000 17% $15,001- $30,000 23% $50,001- $100,000 22% $30,001- $50,000 17% Source: Statistics New Zealand Census 2001

Personal and Household incomes New Zealand has very high employment levels; our unemployment rate is 3.6%; in 2004 when at 3.9%, it was the second lowest in the OECD On average 60% of income is spent on food, housing costs (rent or mortgage) and transportation leaving just over 40% for expenditure on clothing, household operation and other goods and services New Zealanders are avid users of credit cards spending $2billion - $2.5billion per month New Zealanders are also avid use of EFTPOS

Some more data on New Zealanders 40% of New Zealanders have post school qualifications 92% of New Zealanders have personal access to a telephone 74% of New Zealanders have personal use of a mobile phone. Usage in the 15-24 age group is higher 60% of individuals have access to the internet; and surveys suggest about 30% of people have made purchases over the internet in the last year

Personal internet use by gender, age and qualification 100% 80% 69% 69% 69% 86% 80% 66% 80% Internet usage Internet purchasing 60% 58% 40% 39% 39% 39% 29% 30% 27% 27% 28% 20% 17% 10% 4% 19% 0% All Male Female Source: Statistics New Zealand Household use of information and communications technology All percentages based on people age 15 years + (3,202,000) 15 24 25 44 45 64 65 74 75+ No tertiary qualification Tertiary-level qualification

Top 10 things done on the internet Send or receive emails 90 General web browsing or other information 84 Obtaining information on goods and services 65 Internet banking 54 Obtaining information on government organisations or public authorities Download software, patches or upgrades 39 Download or listen to online music 32 Sell goods and services 30 Obtain information on health or health services 28 Job opportunities 28 % 44 Source: Statistics New Zealand Household use of information and communications technology

New Zealand Consumer Law Markets that function well are essential to the New Zealand government s goals of a highincome, knowledge-based market economy Consumer law in New Zealand focuses on helping consumers to help themselves. Consumers are confident when they get what they expect when they shop

The two main consumer laws in New Zealand are: The Fair Trading Act (1986) The Consumer Guarantees Act (2003)

Fair Trading Act (1986) The Act covers all advertising and selling of goods and services. It doesn t cover private sales The Fair Trading Act prohibits misleading and deceptive conduct, false representations and unfair practices by people in trade

Fair Trading Act (cont d) Misleading/Deceptive conduct: If the information you re given gives you the wrong impression about a product or service: A teapot is labelled as stainless steel, but it s actually aluminium False Representations: Bananas are advertised at $1.99 for a 1 kilogram bag, but the bar code at the checkout gives the price as $2.25

Fair Trading Act (cont d) Unfair Trading Practices: Offering prizes and gifts without intending to supply them or not supplying them as offered Bait advertising - advertising at a specified price goods or services without intending to supply them at that price Work from home claims - making misleading claims to others about certain details of businesses which can be carried out from home

Fair Trading Act (cont d) Unfair Trading Practices: Demanding or accepting payment with no intention to supply the goods/services Pyramid selling schemes (these are prohibited under the Act)

Fair Trading Act (cont d) The Fair Trading Act also specifies Product Safety Standards Product safety measures in NZ include: Product safety standards Product bans Compulsory recalls

Consumer Guarantees Act (2003) The Consumer Guarantees Act sets out guarantees that goods and services must meet when sold by someone by a retailer or service person The Act gives consumers rights when they buy faulty goods. It also ensures that consumers have rights when work which has been paid for is not done properly

Consumer Guarantees Act (cont d) Under the Consumer Guarantees Act, goods and services sold must be: Of acceptable quality Fit for the purpose they are made for Safe, durable (last for a reasonable time), have no minor defects and are acceptable in look and finish Matching the description given Of a reasonable price (when a price is not set) Have spare parts and repair facilities available

Industry Led Regulation Well functioning markets include - government regulation both general and specific controls exercised by business organisations on their membership Businesses making sound decisions

New Zealand Supports Industry - Led Regulation We are very supportive of the excellent work of the Direct Selling Association of New Zealand The Code of Practice for Direct Selling in New Zealand has been in place over 10 years and complements existing legislation The code was recently used to evaluate the Ministry of Consumer Affairs industry-led regulation schemes best practice template

New Zealand Supports Industry - Led Regulation continued The Code was able to answer all the questions effectively If industry is responsible and deals with problems then the regulator s role is easier

Challenges Product safety is on the international stage as a major political challenge currently A recent challenge in New Zealand was allegations of unacceptable formaldehyde levels in clothing New Zealand is part of a global marketplace To support consumers in a global marketplace it is important that there is a robust and effective product safety infrastructure

Challenges continued To date there has been a heavy reliance on voluntary industry practice and voluntary use of Standards Can governments rely on this? New Zealand considers industry should have first responsibility for self regulation of product safety A new initiative is Government Product Safety Policy Statements