This output expense provides policy advice and information on issues, policies and programmes affecting or potentially affecting the ability of consumers to transact with confidence.

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.

The following outputs were included in this output expense for 2005/06.

Consumer Policy

This output involves policy advice on issues concerning an effective legal and regulatory framework for business/consumer transactions, the promotion of improved market practices and effective redress, and international consumer policy developments. In 2005/06 the output included the following.

Advancing a programme of work arising from recommendations of the Australian Productivity Commission research study on competition and consumer policy and law coordination.

The Ministry of Consumer Affairs (MCA), alongside the Regulatory and Competition Branch of the Ministry, the Ministry of Foreign Affairs and Trade and the Treasury participated in finalising the 2006 Memorandum of Understanding (MOU) between the New Zealand and Australian Governments on Business Law Coordination. A key area of the MOU is competition and consumer protection policy. Under this heading New Zealand and Australia will continue their work towards achieving information sharing between competition and consumer law enforcement agencies and the Ministry will also work together on industry led regulation and sharing of research.

Continuing to work with Australian consumer agencies on projects with the potential to further harmonise trans-Tasman product safety and trade measurement approaches.

In addition to the work on competition and consumer protection policy above, MCA has continued to be fully involved in two Ministerial Council of Consumer Affairs (MCCA) projects aimed at developing fully harmonised approaches across Australia for product safety and trade measurement respectively. These projects have been given an additional impetus from the Coalition of Australian Governments (COAG) which has, in particular, directed MCCA to report back by December 2006 with recommendations.

The development of a framework for reviewing the effectiveness of self regulatory schemes.

A report was presented to the Minister on submissions received on the first discussion paper on the development of the framework and the next steps regarding finalising guidelines on 9 December 2005.

Leading a cross-Ministry of Economic Development project focused on the implications of behavioural economics for current regulatory schemes and regulatory design in general. The first outputs from this project were a literature review and a workshop in mid 2005.

MCA progressed its work on how behavioural economics may offer new insights into consumer behaviour and the design of regulation. Peter Earl from the University of Queensland was contracted to undertake initial work in this area and presented a seminar to MCA, the Ministry and other invited government agency representatives in September 2005.

Guidelines for government departments engaged in policy development on how behavioural economics can contribute to the analysis of policy options will be completed in 2006/07.

Reviewing the enforcement of consumer protection law, focusing on the Fair Trading Act 1986 and the Consumer Guarantees Act 1993. Particular focus in 2005/06 will be on improving understanding of consumer and trader awareness, behaviour and experience and the implications of this for the effectiveness of current policy settings.

There have been a number of key pieces of work advanced looking at the effectiveness of our core consumer protection legislation. These include the following.

A baseline survey of consumer awareness of consumer law was conducted (2005 National Consumer Survey). The report of the finding concluded that there is overall good awareness of consumer legislation and consumers consider that consumer laws are working. The survey will be used in the overall review of consumer protection law enforcement and redress.
In May 2006, a discussion document was released which discussed New Zealand consumer protection laws in comparison to international legislation and whether there are provisions in international consumer law that could be adopted in New Zealand to enhance our existing law.
In March to May 2006, a baseline survey of business/trader awareness of consumer law was conducted. The findings of this survey are close to being finalised.

Contributing to a consolidated review of securities and insurance law and regulation of non-bank financial institutions (including financial intermediaries).

MCA is participating in the review of financial products and providers being led by the wider Ministry of Economic Development and within that review, is leading the work on consumer dispute resolution in the financial sector.

Consumer Research, Information and Capability Building

In 2005/06 the output included the following:

Reviews of the effectiveness of consumer policy and legislation through systematic monitoring and evaluation with a particular focus in 2005/06 on monitoring the Credit Contracts and Consumer Finance Act 2003.

A monitoring regime is in place based on analysis of complaints and cases received through the Ministry of Economic Development Contact Centre and other sources. A research project on the lower-end credit market in South Auckland has been developed as part of the 2006/07 work programme.

Research on consumer and business interactions including analysing the results of a major baseline survey of consumer awareness and experience of consumer legislation and researching consumer experience and behaviour with respect to non-investment type scams.

A project evaluation report and communications evaluation have been completed and presented to the Minister.

Information to consumers, community agencies and businesses with respect to their legal rights and obligations and access to remedies and redress.

MCA maintained consumer hot lines throughout the year, responding to and recording 5,895 enquiries escalated from the Christchurch Contact Centre, 39 Iwi hot line calls and 140 Pacific hot line calls. In addition, 91 scams were listed on the Consumer Affairs Scamwatch site.

The promotion of effective consumer representation within institutions and agencies dealing with issues that affect consumers.

A partnership agreement has been developed with the New Zealand Federation of Family Budgeting Services (NZFFBS).

Capability building to enable communities and community organisations to identify and address consumer issues.

Work has been undertaken with NZFFBS that has increased their executive level capability to attract funding for the Client Voices Project which provides data and case studies on consumer issues to MCA with input on type and format of data required by staff from MCA.

Participating in international policy and operational fora including those that address issues of international deceptive practices targeting New Zealand consumers.

MCA participated in the Trans-Tasman Fair Trading Officers Advisory Committee with Australian State Government officials.

Motor Vehicle Sales Act 2003 (MVSA)

This output involves the promotion, education about, and evaluation of the effectiveness of the MVSA. Particular focus will be placed on monitoring the effectiveness of the MVSA with a review of the Motor Vehicle Sales Act 2003 to be completed by 31 December 2005, as required by the Act. In 2005/06 the output included the following.

In December 2005, MCA completed a review of the operation of the Motor Vehicle Sales Act 2003 which was forward to the Minister in draft. The Minister agreed to the report being referred to other relevant government agencies for comment and following receipt of these comments, the report was finalised and tabled by the Minister in Parliament in March 2006.

Arising from the review, MCA is now reviewing the Consumer Information Standards (Used Motor Vehicles) Regulations 2003 and will be progressing work on several changes to the Motor Vehicle Sales Act.

Cost

(Figures are GST exclusive)

	2006 Main Estimates $000	2006 Supplementary Estimates $000	2006 Actual $000	2005 Actual $000
Revenue:
Crown	3,234	3,234	3,234	3,413
Other	468	468	459	442
Total Revenue	3,702	3,702	3,693	3,855
Expenses:
Annual appropriations	3,602	3,602	3,600	3,762
Other appropriations	-	-	-	-
Total Expenses	3,602	3,602	3,600	3,762
Net Surplus	100	100	93	93

Sources of Revenue Other

	2006 Actual $000	2005 Actual $000
Electrical levies	248	247
Annual return fees to fund MVTR	186	182
Cost recovery	-	1
Net gain on sale of fixed assets	-	-
Inter-departmental cost recovery	23	12
Miscellaneous	2	-
Total Revenue Other	459	442

Major Budget Variances

The variance between 2005/06 and 2004/05 for actual expenses mainly reflects a reduction of funding due to the phasing of the Credit Contracts and Consumer Finance Act (CCCFA) work programme.

Output Expense > Enforcement and Conformance

Description

This output expense provides for the promotion and enforcement of a supportive measurement and product safety infrastructure for businesses and consumers, particularly through the administration of the Weights and Measures Act 1987 and the product safety provisions of the Fair Trading Act 1986.

Quantity, Quality, Timeliness and Cost

(Performance standards are in brackets where applicable.)

The following outputs were included in this output expense for 2005/06.

Measurement and Product Safety

Measurement

The management of New Zealand's trade measurement environment to meet international standards in relation to goods sold by weight, measure or number included the following activities.

Calibration and verification standards to ensure traceability.

41 APs (accredited private sector organisations) working standards were calibrated and verified. This equates to 241 reports issued on the physical working standards (measures of mass or volume).

Auditing private sector verifiers to ensure trade equipment is verified correctly.

19 APs (accredited private sector organisations) were subject to surveillance and/or audit, to ensure their continued suitability to carry out verification and annual voluntary certification of weighing & measuring equipment used for trade, and all had their accreditation renewed.

Conducting type approval examinations of new types of weighing and measuring instruments to ensure they do not facilitate fraud.

Applications for the following - 2 "full" type approvals for new types of weighing and measuring equipment, 20 "overseas-based" type approvals, and 7 variants to approvals were processed. All type approvals issued complied with the Weights and Measures Regulations, relevant OIML regulations and to ISO 17025 standard.

Ensuring trader compliance with legislative requirements through effective enforcement.

A total of 1,809 compliance inspections of trade weighing and measuring instruments were carried out with 6 infringement notices issued, 39 letters of warning issued and advice given to 180 traders.

New Zealand's interests in intergovernmental organisations dealing with legal metrology were represented by our links with the International Organisation of Legal Metrology (OIML) and the Asia Pacific Legal Metrology Forum (APLMF).

MCA participated in the development and dissemination of 11 (10) OIML international recommendations/documents through a consultative process with industry on a range of issues.

MCA participated in the APLMF activities, including chairing the Working Group on Goods Packed by Measure. MCA also provided training to APLMF members on the practical application of implementing and enforcing OIML R87 (Net contents of pre-packages - the AQS System).

Quantity

Surveillance visits were made to 608 (400) traders to proactively work with them to promote compliance of weighing and measuring equipment and pre-packaged goods with the Weights and Measures Act 1987. A number of proactive projects associated with particular types of equipment or transaction types resulted in a higher level of visits required.

Quality

Maintain a type approvals accreditation regime to ISO 17025 standard.

The quality target was met for the type approvals accreditation regime to be maintained in accordance with the ISO 17025 standard.

Timeliness

Timeframes set by the OIML for reply on each circulated draft recommendation and document were met in all cases.

Product Safety

This output provides for providing product safety services, which encompasses:

building and maintaining national and international product safety networks, for example, through attendance at the joint Australian/New Zealand Consumer Product Advisory Committee;
developing and reviewing relevant voluntary and mandatory standards, and product safety policies;
educating and informing consumers and business about product safety;
investigating and resolving product safety complaints;
administering the product safety provisions of the Fair Trading Act 1986; and
representing the consumer perspective by participating in interdepartmental activities dealing with injury prevention, including the Government Interagency Steering Group on New Zealand Injury Prevention Strategy.

In 2005/06 the following safety services were provided.

Action taken on unsafe products and services.

During the year, voluntary recalls were actioned on the following products - candles, LPG filled air horn, espresso stove coffee maker, flaming gel, chain hoist crane, and Magnetix building sets.

An Unsafe Goods Notice issued for "No Holes Tongue Stud".

Development work on Voluntary and Mandatory Standards.

MCA participated in the development and review of standards in the following Standards Committees - SF-034 Ladders, CS-003 Children's Furniture - highchairs, household cots, Dive Tank Service Standard, pedal bicycles, and CS-018 Safety of Children's Toys.

MCA completed discussion papers and reviewed submissions on rubber hot water bottles, and dummies/pacifiers, and is now developing mandatory standards for both products.

The Product Safety Standards for cots, children's nightwear, children's toys and baby walkers were revised and the new revised standards were implemented.

Quantity

Surveillance visits were made to 323 (300) traders/suppliers to check product safety.

156 (90) consumer complaints were responded to during 2005/06, across a broad range of products and issues.

Quality

All investigations of product safety complaints were carried out in accordance with the Measurement and Product Safety Service Complaints and Procedures Manual and were reviewed by a team leader/manager audit.

Timeliness

95% (95%) of complaints were acknowledged within seven working days of receipt of notification.

Cost

(Figures are GST exclusive)

	2006 Main Estimates $000	2006 Supplementary Estimates $000	2006 Actual $000	2005 Actual $000
Revenue:
Crown	2,033	2,033	2,033	2,027
Other	176	176	153	116
Total Revenue	2,209	2,209	2,186	2,143
Expenses:
Annual appropriations	2,209	2,209	2,209	2,143
Other appropriations	-	-	-	-
Total Expenses	2,209	2,209	2,209	2,143
Net Deficit	-	-	(23)	-

Sources of Revenue Other

	2006 Actual $000	2005 Actual $000
Approval, testing and accreditation fees	131	106
Net gain on sale of fixed assets	-	-
Inter-departmental cost recovery	20	10
Miscellaneous	2	-
Total Revenue Other	153	116

Major Budget Variances

No major variance.

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Printed: 26/11/2009