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Establishment and Development of the Ministry of
Consumer Affairs
Background Paper to Creating Confident
Consumers
May 2003
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Functions
of the Ministry
When officially launched in March 1987 the Ministry was
divided into two sections: policy (including product safety), and
operations. It subsequently acquired the following functions:
- Trade Measurement Unit, December 1988, from the Department
of Labour
- Consumer Complaints, January 1989, from the Consumers
Institute
- Liaison Service, January 1989
- Consumer Education Resource Project, March 1989, from the
Consumers Institute and the Ministry of Education.
Trade Measurement
A 1987/1988 review into the functions of the Department of
Labour concluded that the Weights and Measures Division was
related more to consumer protection and assistance to commerce
than to labour market issues (State Services Commission, 1988).
In October 1988 Cabinet agreed that the Weights and Measures
Division be transferred to the new Ministry of Commerce (Cabinet
Office, 1988). It appears that, at short notice, the Ministers of
Commerce and Consumer Affairs agreed in November that the Weights
and Measures Division should be incorporated into the Ministry
(Ministry of Consumer Affairs, 1988).
[13] The origins of
the move appear to be based in a paper of June 1998 to the
Minister of Consumer Affairs (Ministry of Consumer Affairs,
1988a). The paper proposed a rationalisation of Weights and
Measures legislation and the Fair Trading Act-effectively
splitting the policy and enforcement functions of Weights and
Measures between the Ministry and the Commerce Commission
(Ministry of Consumer Affairs, 1988a).
In agreeing that the Weights and Measures Division move,
Cabinet also directed that it be reviewed to meet a revised set
of objectives. [14]
In the course of the review,
[15] consideration
was given to merging the Weights and Measures Act and the Fair
Trading Act. The objective was to combine enforcement functions
so that Weights and Measures inspectors would enforce the Fair
Trading Act from within the Ministry or, conversely, allow the
Commerce Commission to enforce Weights and Measures legislation.
Reasons cited for merging the legislation included (Hawes, 1989a;
Preston, 1989; Ministry of Commerce, 1989):
- Administration of Weights and Measures legislation was
specific and detailed. The Fair Trading Act sets out broad
principles for trading conduct. In the absence of a change in
policy direction it was preferable to keep the Acts separate.
- Enforcement provisions under the Fair Trading Act and
Weights and Measures Act 1987 differed.
- Trade Measurement officers could already pass information
to the Commerce Commission about a possible breach of the Fair
Trading Act.
- The links between Trade Measurement and the Commerce
Commission could be enhanced without combining enforcement
functions.
The absorption of overheads and costs associated with the
transition of Weights and Measures to the new Trade Measurement
Unit within the Ministry, and the 1991 budget cuts, resulted in
the closure of three of the Unit's seven regional offices.
Regional Consumer Liaison Service
Reflecting community consultations on the establishment of the
Ministry, a pilot programme ran from 1989 until March 1990 in
Otahuhu, Rotorua and Christchurch. The aim of the service was to
raise the level of awareness, knowledge and assertiveness amongst
disadvantaged consumers. An extension of the programme was sought
after a successful pilot stage, but funding for the programme
ended with 1991 budget cuts and the service ended that year.
Complaints Service
Prior to 1989 the Consumers Institute had provided a
government-funded consumer complaints service. With the
withdrawal of government funding this service was transferred to
the Ministry. The Complaints Service began operating in January
1989 from Otahuhu, Rotorua, Wellington, Christchurch and Dunedin.
The main functions of the service were the provision of
information, advice and assistance to consumers with the emphasis
on self-help, and acting as a resource for other organisations
and traders on consumer matters. The Ministry was also concerned
that Maori, Pacific Island and low-income consumers had not
accessed the service run by the Consumers Institute (Ministry of
Consumer Affairs, 1989). The 1991 budget cuts led to the closure
of the Rotorua and Dunedin offices.
The service was renamed the Consumer Advice Service in the
early 1990s to reflect its focus of empowering consumers with
advice and information so that they could resolve their own
problems. It was not the role of the Ministry, nor did it have
the authority, to resolve individual consumer complaints itself.
Consumer Education Resource Project
This project was transferred to the Ministry of Consumer
Affairs from the Consumers Institute and the Ministry of
Education. Its aim was to provide an integrated programme for
consumer education from junior classes to secondary school, and
to develop resources supporting this. The project effectively
ended [16] in 1997
when education was given a lower priority relative to the goal of
targeting Maori, Pacific Island and low-income consumers.
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