Huo Raymond: Commerce (Cartels and Other Matters) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Huo Raymond: Commerce (Cartels and Other Matters) Amendment Bill — First Reading 
[Sitting date: 24 July 2012. Volume:682;Page:3880. Text is incorporated into the Bound Volume.] 
RAYMOND HUO (Labour) 
: 
 Mr Speaker— 
Mr DEPUTY SPEAKER 
: Is this a split call? 
RAYMOND HUO 
: That is my understanding. 
Mr DEPUTY SPEAKER 
: Are the Greens happy? 
Hon Member 
: No it’s not. It’s a 10-minute call. 
Mr DEPUTY SPEAKER 
: Right a 10-minute call Raymond Huo. 
RAYMOND HUO 
: I meant to say that given the time constraint I would like to take a short call but I have got a thumbs up from the Minister of Commerce the Minister responsible for this Commerce (Cartels and Other Matters) Amendment Bill. I feel flattered and honoured. 
I would like to echo what my Labour colleagues said earlier. The reasons are obvious. Firstly from the regulatory impact statement at least 6000 companies from 57 countries have been alleged or proven members of international cartels and secondly almost all of our major trading partners such as the USA the UK Australia and Canada have criminal sanction regimes already in place. Thirdly cartels are designed to control prices and limit competition. They are an illegitimate transfer of wealth from consumers to businesses. 
This bill will effectively bring New Zealand into line with Australia which introduced sanctions in 2009. The bill amends the Commerce Act 1986 to introduce criminal sanctions for serious cartel behaviour and makes a number of other amendments including to the provisions that govern jurisdiction and other penalties. If enacted the bill will fundamentally alter the scope and enforcement of New Zealand’s competition law and will be the most substantive reform of the Commerce Act since it was passed in 1986. 
There has been no survey of public attitudes towards cartel criminalisation in New Zealand but it is interesting to note that the results of a 2008 survey of public attitudes in the United Kingdom precisely mirrored the results of a similar survey recently conducted in Australia—that is there is substantial majority support for the view that cartel conduct is unacceptable but a minority of that think that cartel conduct should be a criminal offence and less than a quarter think that individuals should be jailed for it. It is difficult to see why public attitudes would differ greatly in New Zealand. 
Now what is a cartel? A cartel is a group of similar independent companies that join together to control prices and limit competition. The banned cartel conduct includes price fixing restricting output market allocating and bid rigging—namely companies agreeing on prices to submit for tenders. During the initial consultation process Russell McVeagh raised a concern that the new regime will chill competitive contact due to the uncertainty of its application. The Ministry of Commerce has responded by allocating a budget and asking the Commerce Commission to among other things develop prosecution guidelines that outline when it would take a criminal prosecution and undertake advocacy and education initiatives to promote better understanding of the prohibitions in the Commerce Act particularly the cartel prohibition. I look forward to the development of this bill. Thank you very much. 
Bill read a first time.  
Bill referred to the Commerce Committee.