Vote: Consumer Affairs
Output Class - Policy Advice on Consumer Issues
Description
This output class provides advice on issues concerning an effective legal and regulatory framework for business/consumer transactions, the promotion of improved market practices and effective redress, the administration of consumer safety legislation, and international consumer policy developments.
Quantity, Quality, Timeliness and Cost
Performance standards for outputs other than policy advice are in brackets where applicable.
Work Programme
All policy advice projects were delivered in accordance with the terms of the work programme as agreed with the Minister. Changes to deadlines were discussed with the Minister.
Key Deliverables in the Work Programme for 2003/2004
Provide advice and support to the Minister of Consumer Affairs to facilitate the passage of the Consumer Credit Bill through the House of Representatives.
The Credit Contracts and Consumer Finance Act 2003 received Royal Assent on 13 October 2003. The Act updates, modernises and simplifies the regulatory framework for consumer credit, while reducing compliance costs for business, in particular through deregulating business credit.
During the first half of 2003/2004, housing buy-backs were a significant issue which resulted in a major amendment to the Credit Contracts and Consumer Finance Act 2003 to deal with the reopening of contracts.
Undertake initial scoping, prepare terms of reference and project plans for the review of consumer protection law and its enforcement.
Initial scoping and terms of reference were completed by 30 June 2004.
Projects Not Included in the 2003-2006 Statement of Intent
System to monitor and evaluate the Motor Vehicle Sales Act 2003.
A monitoring and evaluation plan for the Motor Vehicle Sales Act 2003 was put in place in 2003/2004.
Amendments to the Fair Trading Act 1986.
Amendments to the Act designed to promote compliance and strengthen enforcement were introduced during the year. In particular, general penalties have been increased and a tougher penalty regime introduced for pyramid selling schemes. As well, the Commerce Commission's enforcement powers were strengthened, making it easier for the Commission to use remedies under the Act.
Amendments to the Consumer Guarantees Act 1993.
Amendments to the Consumer Guarantees Act 1993 introduced during 2003/2004 ensure that utilities (including electricity, gas, water and telecommunications), as well as computer software, are covered by the Act. The amendments also align the definitions of goods and services in the Consumer Guarantees Act 1993, Commerce Act 1986 and Fair Trading Act 1986.
GM-free labelling.
A paper was submitted to Cabinet Policy Committee scoping what would be required for an inter-departmental working group to facilitate the development of a voluntary GM -free labelling system. This paper was accepted by Cabinet and discussions were held with the Commerce Commission on the development of guidelines for business and consumers on compliance with the Fair Trading Act 1986 where a business wishes to label a product as GM-free.
Consumer Safety
The following consumer safety services were delivered in 2003/2004.
Develop and review relevant voluntary and mandatory standards, and consumer safety policies.
Nine voluntary and mandatory standards were developed/reviewed during the year.
Educate and inform consumers and businesses about consumer safety.
The Ministry of Consumer Affairs released or contributed to 17 safety articles, fact sheets and public statements, and gave consumer safety presentations to eight community organisations including Māori Women's Welfare League branches.
Investigate and resolve consumer safety complaints.
The Ministry of Consumer Affairs investigated and resolved 103 consumer safety complaints, and 17 unsafe products were removed from sale or made safe as a result of complaints and proactive investigations.
Administer the mandatory powers and provisions of the Fair Trading Act.
The mandatory powers and provisions of the Fair Trading Act were not used in 2003/2004 as voluntary action was undertaken to address safety issues.
Build and maintain national and international consumer safety networks.
The Ministry of Consumer Affairs attended three trans-Tasman consumer safety cooperation meetings, three meetings scheduled by the Consumer Products Advisory Committee (under the auspices of the Ministerial Council on Consumer Affairs), and a Joint Standard Committee meeting during 2003/2004. The Ministry of Consumer Affairs also commented on the Review of the Australian Consumer Product Safety framework.
Cost
(Figures are GST exclusive)
| | 2004
Main
Estimates | 2004
Supple-
mentary
Estimates | 2004
Actual | 2003
Actual |
| | $000 | $000 | $000 | $000 |
| Revenue: | | | | |
| Crown | 1,168 | 1,293 | 1,287 | 1,188 |
| Other | - | - | 5 | - |
| Total Revenue | 1,168 | 1,293 | 1,292 | 1,188 |
| Expenses: | | | | |
| Annual appropriations | 1,168 | 1,293 | 1,292 | 1,188 |
| Other appropriations | - | - | - | - |
| Total Expenses | 1,168 | 1,293 | 1,292 | 1,188 |
| Net Surplus/(Deficit) | - | - | - | - |
Sources of Revenue Other
| | 2004
Actual | 2003
Actual |
| | $000 | $000 |
| Inter-departmental cost recovery | 4 | - |
| Miscellaneous | 1 | - |
| Total Revenue Other | 5 | - |
Major Budget Variances
The Supplementary Estimates change ($125,000) reflected a transfer of funding from Vote Commerce to meet residual cost pressures.
The variance between 2003/2004 and 2002/2003 for actual expenses reflects increased policy capability following a review of the Ministry of Consumer Affairs.
Output Class - Information and Education Services for Consumers and Traders
Description
This output class provides information and education primarily on legal rights and responsibilities to consumers, community agencies that advise consumers, and businesses, including the provision of information to consumers on how to access remedies and redress if a transaction fails. The output class also includes consumer representation on statutory boards, advisory bodies, departmental working parties and committees.
Quantity, Quality, Timeliness and Cost
(Performance standards are in brackets where applicable.)
Key Deliverable in the Work Programme for 2003/2004
Implement a programme to promote the Motor Vehicle Sales Act (MVSA) and provide information, education and advice resources on it for consumers, business and community advisory agencies.
Quantity
The Ministry delivered an initial major awareness campaign on the MVSA for consumers and motor vehicle sellers with follow-up awareness activities spread over the year, and a round of training on the MVSA for community agencies.
Quality
Undertake an evaluation, including a survey of consumers and/or business, at the end of the major campaign period.
As the campaign was still under way at 30 June 2004 the campaign evaluation had not been completed.9 However, over 2,000 traders attended MVSA seminars and over 8,000 Supplier Information Notice (SIN) forms were downloaded from the Ministry of Consumer Affairs' website from January - June 2004. A survey conducted by 30 June 2004 showed that awareness of the MVSA and its impact increased from 18% to 47% as a result of the campaign.
Trial the training package with a group of intended recipients and evaluate the training afterwards. Feedback sought from participants in each of the above activities, will rate the consultation process, appropriateness of the content and programme delivery as (3) satisfactory to (4) very satisfactory10).
The training package was trialled with the New Zealand Association of Citizens' Advice Bureaux. The average rating received for the training round was 3.5 which equates to a "satisfactory" rating for the training received.
Timeliness
The awareness campaign will begin on the commencement date of the Act and continue at intervals throughout the fiscal year.
The consumer awareness campaign began in mid-November 2003 before the Act's commencement date of 8 December 2003 and continued at intervals throughout the fiscal year.
Training will occur in the month prior to the commencement date of the Act or between June and November, depending upon the law's start date.
Training took place in November 2003 with both community agencies and business sectors.
Cost
(Figures are GST exclusive)
| | 2004
Main
Estimates | 2004
Supple-
mentary
Estimates | 2004
Actual | 2003
Actual |
| | $000 | $000 | $000 | $000 |
| Revenue: | | | | |
| Crown | 2,076 | 1,826 | 1,826 | 1,814 |
| Other | 59 | 283 | 276 | 373 |
| Total Revenue | 2,135 | 2,109 | 2,102 | 2,187 |
| Expenses: | | | | |
| Annual appropriations | 2,135 | 2,419 | 2,418 | 2,187 |
| Other appropriations | - | - | - | - |
| Total Expenses | 2,135 | 2,419 | 2,418 | 2,187 |
| Net Surplus/(Deficit) | - | (310) | (316) | - |
Sources of Revenue Other
| | 2004
Actual | 2003
Actual |
| | $000 | $000 |
| Electrical levies | 86 | 366 |
| Annual Return fees to fund MVTR | 185 | - |
| Cost recovery | 2 | 7 |
| Net gain on sale of fixed assets | 1 | - |
| Inter-departmental cost recovery | 1 | - |
| Miscellaneous | 1 | - |
| Total Revenue Other | 276 | 373 |
Major Budget Variances
The Supplementary Estimates change ($284,000) reflected funding to promote new motor vehicle sales legislation ($500,000), and new funding for the Powerswitch website and associated work programme ($34,000), partly offset by a transfer of funding from 2003/2004 to 2004/2005 for implementation of the Consumer Credit Bill (-$250,000).
The variance between 2003/2004 and 2002/2003 for Revenue Other (-$98,000) mainly reflects a decrease in electrical levies (-$280,000) offset by new fees collected from the motor vehicle traders' registration fee ($185,000), a new service.
The variance between 2003/2004 and 2002/2003 for actual expenses ($229,000) mainly reflects a reduction in Powerswitch (-$271,000) activities and promoting new motor vehicle sales legislation ($500,000).
Output Class - Administration of Trade Measurement Legislation
Description
This output class provides for the promotion and enforcement of a supportive trade measurement infrastructure for businesses and consumers, particularly through the administration of the Weights and Measures Act 1987. This legislation sets out requirements for a standardised system and creates incentives for compliance through enforcement processes.
Quantity, Quality, Timeliness and Cost
Enhancing the National Measurement Capability
Initial scoping, terms of reference and project plans for a study of the scope of measurement activity that could benefit from the application of international legal metrology standards.
Initial scoping was completed, terms of reference developed and a project plan had been prepared by 30 June 2004. In 2004/2005, the project is moving into active review work looking at areas where increased measurement capability can benefit economic activity and social well being.
Generic quantity, quality and timeliness performance measures for all policy advice, ministerial services and briefings supplied by the Ministry of Consumer Affairs applied as detailed in the Ministry of Economic Development's Quality Standards for Policy Advice and Ministerial Servicing.
Key project milestone dates, as specified in the project plan were met.
National Trade Measurement System
New Zealand's trade measurement environment was managed to meet international standards in relation to goods sold by weight, measure or number through the following activities.
Calibration and verification of standards to ensure traceability.
All 39 active accredited persons' standards were tested. All accredited persons standards' calibration and verification were undertaken in compliance with International Accreditation New Zealand (IANZ) approved procedures.
Audit of private sector verifiers to ensure trade equipment is verified correctly.
Nineteen surveillance audits of private sector verifiers were carried out.
Type approval examinations of new weighing and measuring instruments to ensure they do not facilitate fraud.
Applications for approvals for new types of weighing and measuring equipment (4), overseas-based approvals (26), and variants to approvals (22) were processed. All type approvals issued complied with the Weights and Measures Regulations and relevant OIML recommendations.
Enforcement to ensure trader compliance with legislative requirements.
A total of 332 trader compliance inspections of trade weighing and measuring instruments were carried out with 13 infringement notices issued.
Cost
(Figures are GST exclusive)
| | 2004
Main
Estimates | 2004
Supple-
mentary
Estimates | 2004
Actual | 2003
Actual |
| | $000 | $000 | $000 | $000 |
| Revenue: | | | | |
| Crown | 1,402 | 1,402 | 1,399 | 1,349 |
| Other | 160 | 168 | 171 | 106 |
| Total Revenue | 1,562 | 1,570 | 1,570 | 1,455 |
| Expenses: | | | | |
| Annual appropriations | 1,562 | 1,570 | 1,570 | 1,464 |
| Other appropriations | - | - | - | - |
| Total Expenses | 1,562 | 1,570 | 1,570 | 1,464 |
| Net Surplus/(Deficit) | - | - | - | (9) |
Sources of Revenue Other
| | 2004
Actual | 2003
Actual |
| | $000 | $000 |
| Approval, testing and accreditation fees | 119 | 106 |
| Net gain on sale of fixed assets | 1 | - |
| Inter-departmental cost recovery | 1 | - |
| Miscellaneous | 50 | - |
| Total Revenue Other | 171 | 106 |
Major Budget Variances
The Supplementary Estimates increase reflected a contract with NZ Aid to investigate and provide a report on measurement capability in Cambodia, Laos, Myanmar and Vietnam.
The variance between 2003/2004 and 2002/2003 for Revenue Other reflects an increase in the amount charged for weights and measures type approval fees and contestable charges, as well as additional income from the NZ Aid contract.
The variance between 2003/2004 and 2002/2003 for actual expenses reflects a new OIML position and additional work relating to the NZ Aid contract.
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