Vote: Consumer Affairs
Output Class D1 - 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. Delays and changes to deadlines were negotiated with the Minister.
Key Deliverables in the Work Programme for 2002/2003
Support the passage through Parliament for the Consumer Credit Bill, Consumer Protection (Definitions of Goods and Services) Bill, Fair Trading Amendment Bill and Motor Vehicle Sales Bill in accordance with the Government’s legislative timetable.
Consumer Credit Bill: The Bill was introduced on 17 September 2002. The first reading speech was delivered on 18 February 2003. Select committee report back is scheduled for 17 August 2003. At 30 June 2003, work was under way on a Supplementary Order Paper to include buy-back schemes within the scope of the Bill.
Consumer Protection (Definitions of Goods and Services) Bill and Fair Trading Amendment Bill No. 3: Both Bills were reported back from the Commerce Committee on 18 November 2002. Second reading speeches for both Bills were delivered on 1 April 2003. Royal Assent for both Bills was given on 7 July 2003.
Motor Vehicle Sales Act 2003: Royal Assent was given on 9 April 2003. The Ministry supported implementation through work on the establishment of a register of motor vehicle traders, arrangements for administering the Motor Vehicle Sales Act 2003, and minor technical amendments to the Act through the Statutes Amendment Bill 2003.
Initiate reviews of consumer protection law and its enforcement, Credit (Repossession) Act and Auctioneers Act by 30 June 2003.
Work on supporting the passage of a number of pieces of key legislation demanded more time than originally scheduled, leading to the deferment of the commencement of the review of consumer protection law until 2003/2004. The review of the Credit (Repossession) Act has also been deferred to 2003/2004 because of timing issues related to the Select Committee process for the Consumer Credit Bill. Preliminary scoping of the review of the Auctioneers Act had been undertaken by 30 June 2003.
Support the development of the 2002 Code of Banking Practice through to 31 December 2002.
The Ministry made a comprehensive contribution to the development of the 2002 Code of Banking Practice, through liaison with the NZ Bankers Association.
Complete consultation concerning trader guidelines for the use of inertia-selling techniques for services by 30 June 2003.
The Ministry consulted with stakeholders regarding trader guidelines for the use of inertia-selling techniques for services. There was a consensus that guidelines are unnecessary, because current legal provisions and adverse customer response to inertia-selling are sufficient. This was reported to the Minister of Consumer Affairs, who directed the Ministry of Consumer Affairs to continue to monitor inertia-selling practice and respond on a case-by-case basis to incidents if, and when, they occur.
Report on insurance issues concerning people with criminal convictions and disclosing of material facts by 30 September 2002.
With the approval of the Minister of Consumer Affairs this item was removed from the work programme. The Ministry of Justice is leading the policy work in this area.
Contribute to or attend three international fora dealing with consumer policy/protection in e-commerce by 30 June 2003.
- Attended the APEC E-Commerce Steering Group (ECSG) meeting, associated e-Government forum, and the e-APEC Task Force meeting in Acapulco in August 2002. The Ministry’s report on consumer protection in the APEC region was accepted by the ECSG and endorsed by APEC Ministers. The report and accompanying principles provide the basis for developing a better-integrated regional approach to consumer protection.
- Attended the meeting of the OECD Committee on Consumer Policy (CCP) in April 2003. The Ministry provided substantial input into drafting the OECD guidelines on cross-border enforcement, which were adopted by the OECD Council on 18 June 2003. The Ministry also co-ordinated New Zealand feedback on OECD proposals for new work on spam. This project is expected to be the next issue considered by the CCP.
- The Ministry provided comments on a number of project briefs developed for a trans-Tasman working group on consumer protection in e-commerce and redrafted key sections of the working group’s paper on web seals for the Victorian project leader.
- In addition, the Ministry co-ordinated New Zealand’s participation in the APEC working group developing privacy guidelines to address widespread consumer concerns, and provided extensive comments on the first draft in May 2003.
Consumer Safety
Quantity
Complaints
- 74 (90 estimated) product safety related complaints were received and actioned.
Unsafe Products
- Resulting from complaints and proactive investigations, 15 (30 estimated) unsafe products were identified and removed from sale or made safe.
Publications
- Eight (18 estimated) safety articles, fact sheets and public statements were released. These comprised two fact sheets, five Word of Advice (media articles) and one magazine article. In addition, the Ministry produced and distributed a safety board game for children. Publications are targeted to provide information for consumers and traders on current safety issues or changed requirements that arise in the course of the year. Forecast numbers are estimates only, based on anticipated issues. The smaller number of publications produced than forecast reflects both fewer changed requirements and fewer complaints received.
- Standards
- Two (one) special exemptions under the Trans-Tasman Mutual Recognition Agreement were resolved. The Ministerial Council on Consumer Affairs has agreed mutual recognition be adopted for fashion spectacles and sunglasses, and for tobacco product labelling.
- 11 (11) standards were developed or revised. Input during development or revision was provided on 11 national standards (of which four are mandatory standards).
Quality
All (all) complainants surveyed indicated that they were (3) satisfied to (4) very satisfied11 with the handling of consumer safety complaints and product labelling and instructions complaints.
All (all) media and publicity releases and fact sheets complied with Ministry of Consumer Affairs (MCA) publication guideline standards.
All (all) stakeholders who responded to a survey undertaken in June 2003 by the Ministry of Consumer Affairs stated that they were (3) satisfied to (4) very satisfied with the Ministry’s work in the consumer safety area12. Five responses specifically referred to consumer safety work of which two rated “3” and three rated “4”.
Timeliness
Key milestone dates, as specified in project plans, are met for the following programmes:
- adequate instructions and labels for consumer products;
- international initiatives (including TTMRA);
- development of consumer standards; and
- “GM free” voluntary labelling system.
All key milestone dates were met.
Cost
(Figures are GST exclusive)
| 2003 | 2003 | 2003 | 2002 |
| Main Estimates | Supplementary Estimates | Actual | Actual |
| $000 | $000 | $000 | $000 |
| Revenue: | | | | |
| Crown | 1,168 | 1,189 | 1,188 | 1,295 |
| Other | -- | -- | -- | 4 |
| Total Revenue | 1,168 | 1,189 | 1,188 | 1,299 |
| Expenses: | | | | |
| Annual appropriations | 1,168 | 1,189 | 1,188 | 1,299 |
| Other appropriations | -- | -- | -- | -- |
| Total Expenses | 1,168 | 1,189 | 1,188 | 1,299 |
| Net Surplus/(Deficit) | -- | -- | -- | -- |
Revenue Other was derived from miscellaneous.
Major Budget Variances
The Supplementary Estimates change reflects a transfer of funding from Vote Commerce to meet cost pressures arising from the re-allocation of Ministry-wide costs.
The variance between 2002/2003 and 2001/2002 for actual expenses reflects increased activity in 2001/2002 to meet funding pressures associated with work on policy issues and risk mitigation with costs associated with consumer affairs activities; these pressures reduced in 2002/2003.
Output Class D2 - Information and Education Services for Consumers and Traders
Description
This output class provides information and education for consumers, businesses and community groups, including activities aimed at Māori, Pacific peoples and low-income consumers. The output class also includes work to promote consumer representation and recognition of the value of consumer representatives on boards and committees.
Quantity, Quality, Timeliness and Cost
(Performance standards are in brackets where applicable.)
Quantity
Resources and programmes for community advisory agencies
Three (3) training programmes, including resources, were delivered to community advisory agencies. Training was provided to the Budget Advisory Services, to Citizens Advice Bureaux, and to branch members of the Māori Women’s Welfare League.
Hotlines for community agencies and Māori and Pacific consumers
Three (3) hotlines with 0800 numbers were operated for use by community agencies, Māori community agencies and consumers, and Pacific Island consumers.
Programmes targeting Māori and Pacific communities
Two (2) programmes of activities targeting Māori and Pacific communities were conducted. A programme comprising media and community networking was provided for Pacific communities. Māori were targeted through the Māori Women’s Welfare League initiative for 2002/2003.
Promotional publicity campaigns
Two (4) promotional publicity campaigns were conducted. This was fewer than forecast as promotion of new legislation was not required during the period. Two promotional publicity campaigns were delivered on the availability of the Powerswitch comparative information facility for domestic electricity consumers.
Publish one new resource for motor vehicle retailers on relevant consumer law.
A resource on the Motor Vehicles Sales Act was not required as the Act was not passed until April 2003. A project plan and specifications for information and education programmes to promote the Motor Vehicle Sales Act were developed. Drafting of resource material had begun at 30 June 2003.
Draft guidelines for consumer representation on decision-making bodies
One (1) set of draft Guidelines on Consumer Representation was developed, promoted and distributed.
100% (75%) of government departments had been consulted on the Guidelines on Consumer Representation by 30 June 2003.
The Ministry decided to invite all government departments to comment on the Guidelines to ensure comprehensive coverage.
Participate in one international deceptive practice identification initiative.
Participated in the International Consumer Protection and Enforcement Network (ICPEN) annual international deceptive practice identification exercise (Sweep Day) by providing support to the Commerce Commission, who will take the lead on New Zealand’s participation in this exercise in future.
Quality
All (all) stakeholders who responded to a survey undertaken in June 2003 by the Ministry of Consumer Affairs stated that they were (3) satisfied to (4) very satisfied13 with the Ministry’s work in the consumer information and education area14. Four responses specifically referred to consumer information and education work of which two rated “3” and two rated “4”.
All (all) published material intended for external audiences complied with Ministry of Consumer Affairs (MCA) publication guideline standards.
Community agencies rated the consultation process, appropriateness of the content and delivery of programmes as (3) satisfactory to (4) very satisfactory (average rating 3.5).
On completion of Powerswitch promotional activities, the number of hits on the Powerswitch website increased by 27% (20%).
International partners rate the value of the MCA contribution to cross-border consumer protection and enforcement as (3) satisfactory to (4) very satisfactory.
International partners (members of ICPEN) provided comment that rated the value of the MCA contribution to cross-border consumer protection and enforcement as very satisfactory.
Timeliness
Key milestone dates, as specified in project plans, are met for the following programmes:
- provision of programmes, promotional campaigns and resources;
- provision of resources for businesses;
- strategies to enhance consumer representation; and
- international operational initiatives.
All key milestone dates were met.
Cost
(Figures are GST exclusive)
| 2003 | 2003 | 2003 | 2002 |
| Main Estimates | Supplementary Estimates | Actual | Actual |
| $000 | $000 | $000 | $000 |
| Revenue: | | | | |
| Crown | 1,826 | 1,845 | 1,814 | 1,674 |
| Other | 342 | 342 | 373 | 421 |
| Total Revenue | 2,168 | 2,187 | 2,187 | 2,095 |
| Expenses: | | | | |
| Annual appropriations | 2,168 | 2,187 | 2,187 | 2,095 |
| Other appropriations | -- | -- | -- | -- |
| Total Expenses | 2,168 | 2,187 | 2,187 | 2,095 |
| Net Surplus/(Deficit) | -- | -- | -- | -- |
| Sources of Revenue Other | $000 | $000 |
| Electrical levies | 366 | 412 |
| Cost recovery | 7 | 7 |
| Miscellaneous | -- | 2 |
| Total Revenue Other | 373 | 421 |
Major Budget Variances
The Supplementary Estimates change reflected anticipated additional costs associated with the Radio Spectrum Management Group restructure in November 2002.
The variance between the Supplementary Estimates and actual Revenue Other reflects greater than expected revenue from RTRW VHF fees for both radio and television. The variance between the Supplementary Estimates and actual expenses reflects the RSM review of November 2002 which, while additional costs were expected, resulted in expected savings crystallising earlier and at a greater value than anticipated.
The variance between 2002/2003 and 2001/2002 for Revenue Other mainly reflects an increase in RTRW VHF television fees.
Output Class D3 - Administration of Trade Measurement Legislation
Description
This output class provides for the administration of trade measurement legislation. Outputs in this output class are:
- managing New Zealand’s trade measurement environment to meet international standards in relation to goods sold by weight, measure or number;
- drafting amendments to the Weights and Measures Regulations 1999 to provide for changes in responsibility for food quantity marking;
- participating in the activities of inter-governmental organisations dealing with legal metrology, including the International Organisation of Legal Metrology (OIML) and the Asia Pacific Legal Metrology Forum (APLMF); and
- initiating a study of the scope of measurement activity that could benefit from the application of international legal metrology standards.
Quantity, Quality, Timeliness and Cost
(Performance standards are in brackets where applicable.)
Quantity
Inspections and audits completed
- 346 (360) trader compliance inspections representing a cross section of traders; and
- 14 (22) full company surveillance audits.
The variance was due to an increased volume of other work priorities, including pattern approval examinations, accreditation applications, and project work such as the review of the accreditation scheme.
Quality
Accredited persons’ standards’ calibration and verification were undertaken in compliance with International Accreditation New Zealand (IANZ) approved procedures.
100% (100%) compliance with the Quality Management System for standards testing and type approval examinations was achieved, as verified by IANZ annual audit.
93% (90%) of clients who responded to a survey undertaken in June 2003 by the Ministry of Consumer Affairs indicated that they were (3) satisfied to (4) very satisfied15 with the following processes: type approvals, private sector accreditations, surveillance audits of accredited persons, and complaints handling16. Thirteen responses specifically referred to trade measurement work of which three rated “3” and nine rated “4”.
All (all) type approvals issued complied with the Weights and Measures Regulations and relevant OIML recommendations.
All (all) letters of warning, infringement offence notices and prosecutions complied with the Trading Standards Service Enforcement and Compliance policy.
Non-compliance rates for trade weighing equipment were 8.5% (less than 3%), and non-compliance rates for measuring equipment were 18.6% (less than 10%), as revealed by compliance inspections. The variance was due to targeting areas of non-compliance in relation to light industrial weighing instruments and industrial petroleum meters. Note that the rates reduced to the target levels in the fourth quarter.
All cases prepared were accepted for prosecution by Crown Solicitors.
No cases were prepared.
Timeliness
100% (95%) of accredited persons’ corrective action requests were resolved within 90 days.
All (all) accredited persons’ standards were calibrated and verified in a testable condition, within 20 working days of receipt.
All (all) work on approval applications was completed within 50 working days after the instrument became available.
All (all) work on accreditation applications was completed within 50 working days of the applicant being ready for audit.
All (all) full company surveillance audits were completed within the timeline set out in the surveillance policy manual.
All prosecutions and infringement offence notices will meet statutory timeframes.
There were no prosecutions. All infringement offence notices met timeframes.
Key project milestone dates, as specified in project plans, are met for the following programmes:
• amendments to Weights and Measures Regulations 1999;
• inter-governmental organisation activities; and
• reporting on the scope of measurement activity.
A study of the scope of measurement activity that would benefit from the application of international legal metrology standards was to have been initiated. Due to the volume of other activity, this was deferred until 2003/2004. All other key milestone dates were met.
Cost
(Figures are GST exclusive)
| 2003 | 2003 | 2003 | 2002 |
| Main Estimates | Supplementary Estimates | Actual | Actual |
| $000 | $000 | $000 | $000 |
| Revenue: | | | | |
| Crown | 1,342 | 1,349 | 1,349 | 1,385 |
| Other | 100 | 115 | 106 | 92 |
| Total Revenue | 1,442 | 1,464 | 1,455 | 1,477 |
| Expenses: | | | | |
| Annual appropriations | 1,442 | 1,464 | 1,464 | 1,477 |
| Other appropriations | -- | -- | -- | -- |
| Total Expenses | 1,442 | 1,464 | 1,464 | 1,477 |
| Net Surplus/(Deficit) | -- | -- | (9) | -- |
| Sources of Revenue Other | $000 | $000 |
| Approval, testing and accreditation fees | 106 | 91 |
| Miscellaneous | -- | 1 |
| Total Revenue Other | 106 | 92 |
Major Budget Variances
The Supplementary Estimates change refers to expenditure associated with a forecast increase in trade measurement revenue ($15,000), and a transfer of funding from Vote Commerce to meet cost pressures arising from the re-allocation of Ministry-wide costs ($7,000).
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