Creating Confident Consumers

Review of the Ministry of Consumer Affairs

|Index|Phase One: Report : Background Papers|Phase Two: Final Report|

Appendix D: Staff Reference Group and Staff Comments Not Included in the Report

Part A: Issues Raised by the Staff Reference Group

Issues

Issue

Review Team Response

One person commented that overall the Review Report made sense, noted that it all hangs on the identification of the correct high-level outcome. From the ESS perspective it was thought that the high-level outcome is a bit narrower than it could be. Transactions are not the only issue. It isn't always a transaction which causes a problem in which the Ministry intervenes. And confidence isn't always enough.

See comment made to issue 2 in Part B.

General comment was that the paper needs ... (to) focus tightly on the Terms of Reference. For example, less about what we're doing now (but balance with need to provide context), less about globalisation - be careful not to be too focussed on policy programme. The recommendations need to be expressed more plainly. The SRG also recommended that the section on the Ministry's existing core functions needs to be described by function not by section, which reinforces silos. The staff PSA representative raised the issue of the timing of the consultation with the SRG, and the fact that they are, in fact, not being consulted until the Report has been through several drafts. The expectation was that they would be consulted during the development. She saw this as a failure of the process and advised that in Phase 2 this kind of process would be quite unacceptable to the PSA. Another SRG member said that she felt that they had not been a Reference Group, hadn't been involved to the extent that they had hoped for.

See the comment made to issue 1 in Part B.

"Transacting with confidence" - Is our focus too much on consumer rights rather than on responsibilities. There was discussion about what "confidence" means in the context of the outcome. The question was raised whether consumers are naturally confident. Or is confidence something they need to learn? Also, do consumers know how to behave in the market? It's not about knowledge, it's about behaviour. Should sustainability be identified as a future trend. The Review Team suggested that sustainability issues could be addressed as they arose by applying the guidelines for involvement.

See comments made to issue 5 in Part B.

We also need to cover people where they need protection against risk but maybe this is too paternalistic. For example protecting people against themselves e.g. seat-belts. Do we care if consumers are not responsible? For example, scams, do we care if they continue to send money? We also need to look at what impacts on consumer behaviour.

Some of these issues are dealt with in the background paper on analytical frameworks.

The area on enforcement is not transparent. Staff need to have clarity about whether there will be further change beyond the forthcoming review of consumer law and its enforcement. Discussion and recommendations around enforcement need amending.

The Review Team cannot pre-empt the process or findings of the proposed review of consumer law and its enforcement.

Globalisation should it extend to the issue of sustainability? should it include the use of consumers' own information and privacy?

See comment made to issue 5 in Part B.

The Report has not examined the effect of the presence of target groups and the effects of targeting on policy and where that may go.

The Review Team acknowledged that research has not yet been done but needs to be done in the future.

Other Points Made

Need to refocus the mention of longevity of service to a discussion about the real issue which is loss of skills and expertise, in addition to institutional memory.

In reference to consumers demanding "high quality" goods the Review Team needs to be aware that many consumers don't demand high quality, they take what they can afford.

A comment was made asking whether the current position of MCA can be described as "stable".

The point was made that priority issues in other agencies may impact on the achievement of our outcomes. What effort should we put into working with those other agencies.

Part B: Feedback from Staff

Process to Be Followed

It was agreed that the Review Team would discuss all of the matters raised and respond to the points.

Issues

Issue

Review Team Response

Role of the Staff Reference Group A general concern was expressed that there is a mismatch between the role of the Staff Reference Group as it was explained at the beginning of the Review and how it has transpired. There have been two meetings and each occurred after decisions had been made. The first at the time when the Terms of Reference had been set after the Review Team's induction, and the second after the Report was drafted. There were no meetings while the Report was being developed. It was the view of the staff that the Staff Reference Group needed to be involved before things were set in concrete. It was also noted that the Review Team does not include MCA staff from the regions but the Reference Group does. This is an important consideration. It was the staff view that this inadequate process had not laid a particularly good foundation for moving into Phase 2. It was also brought to the Review Team's attention that the process followed for the review of ESS in 1999 was recommended at that time as an appropriate process to follow.

The Review Team noted the concerns expressed by staff and these have been conveyed to the General Manager for future reference.

The Report does address certain important aspects of consumer participation in the marketplace and it does to a certain extent represent the functions and roles MCA plays. But it does not cover them all, particularly some of the broader public safety functions of ESS and Consumer Safety.

The Review Team considers that the proposed outcomes framework encompasses the primary drivers of the Ministry's work. We accept that the public safety aspects of the work done by Consumer Safety and ESS sit outside this framework to some extent, although we think there are synergies to be gained by avoiding unnecessary fragmentation of safety operations and policy between different agencies. We agree that this work is important, and that the Ministry is well-placed to carry out these functions. We have added a note to clarify this.

The Report reads academically and is not well-grounded in MCA reality. Many staff commented that they cannot see themselves in the document. The document is too conceptual. Some operations staff said that the Report doesn't address service delivery concerns. A good Executive Summary would help a lot.

The Review Team has deliberately addressed the issues at the conceptual and strategic level. This is what the Terms of Reference directed us to do. It is Phase 2 which will supply the specific detail about how such a strategy is implemented.

Has the Report addressed events which have happened since the inception of the Review?

Yes it has. Specifically there was considerable discussion about the weathertightness of buildings and about the impact of Government decision-making.

The examples used in the Report tend to be the ones known by Review Team members. This is too narrow. There may be other examples, other trends and other issues which have not been picked up.

The Review Team considered a wide range of issues. The issues included in the Trends background paper were given priority over other issues for a variety of reasons. The Team used the information-based analytical framework and the guidelines for involvement to make a preliminary choice between issues. We decided not to include some issues such as sustainability, because they are multi-dimensional issues that will likely require a whole of Government response. The decision to pick up such issues has potentially significant resource and alignment implications and would require careful consideration and consultation across Government agencies. The Review Team anticipates that, using the guidelines for involvement, the Ministry would likely play a part in addressing these issues, but would not take on a lead role.

The terms confidence, experience, and behaviour need to be defined.

The meaning of these words is the normal dictionary meaning. They are not used in the Report in any technical way.

ESS were not included in this Report. How will they now be brought back into the exercise.

This is a matter for the General Manager in Phase 2.

Changing market practices. The Internet auctions example needs to be pruned, it is too long.

The Review Team examined the section and comments that the length does not reflect the importance or the priority to be given to this issue. The decision was to leave it as is.

Recommendation 11. This does not emerge from the paper. It is a quite specific issue and unless it comes through the paper, it should be deleted.

Reviewed and recommendation remains but is now better tied to the Report.

10.

Study quoted under "changing consumer characteristics" should be removed from the paper because it is a marketing study and as such it is inappropriate.

The Team considers that it is essential for the Ministry's policy development to be based on information, and we note that this information is not always available from Government sources (e.g. Statistics New Zealand). We acknowledge that some staff may consider it inappropriate to use marketing information to inform our understanding of consumer behaviour, given the reasons why this information may be generated. However, we think that this information can be a valuable source of information, given the incentives of marketing researchers to understand how consumers behave. As with all research, there may be flaws with this information, which means the Ministry needs to be careful about how it is used and the reliance that is placed on it. However, we think it would be short-sighted to preclude ourselves from using a potentially valuable source of information. The section has been reworded to make it clear that this is simply a "model" and should be used as such. The information which has been cited in the Report has some value, in that it challenges some of our assumptions. We do not necessarily recommend being bound by the terms used in the research. We also note that the information was presented at a conference on consumer strategy, which was run by a government agency in Australia, and we understand that it is likely to inform the development of a consumer policy strategy in Queensland. Therefore, we are not alone in seeing some value in this research.

11.

Is "Consumers transact with confidence" the answer to a problem?

Yes it is. The Review Team have made revisions which they believe make this clear.

12.

It was suggested that all of the evidence is that dissatisfied customers tell everyone and have impact not the other way around.

The Report is not referring to individuals but to the market. The paragraph has been revised to make this clear.

13.

Some staff indicated that they do not believe that markets can and will collapse.

It is true that markets rarely collapse, in the way the stock market has collapsed twice, because action is usually taken before that occurs. This does not make it impossible

14.

Some staff took strong exception to the phrasing of the ideas on the role of information in creating consumer preferences and expectations. It was seen as victim blaming.

The opinion is noted. Our approach is consistent with international literature.

15.

The Team should have looked at a hybrid framework for New Zealand, not accepted the information framework just because it was the most suitable.

The Review Team did analyse the frameworks and in the main, the information framework is the most applicable to the current work of MCA and the work proposed. This does not preclude other analytical frameworks being used in appropriate instances and the Report now reflects this.

16.

Some staff considered that MCA does not fit comfortably within MED's strategic framework. There was a feeling that despite this the Review Team had just accepted that it had to, and gone ahead. The preference was for MCA to press MED to fit with MCA not vice versa. There was also criticism of the MED approach to the development of their strategic direction.

The first question we asked ourselves at a general level, was there a good strategic fit within MED. We considered that there was in the same way that the original review setting up the Ministry concluded that Consumer Policy is economic in character and relates to the position of consumers in the marketplace. Following this we worked on the outcomes framework and this work confirmed our earlier opinion.

|Index|Phase One: Report : Background Papers|Phase Two: Final Report|

Review of the Ministry of Consumer Affairs