Jones Dail: Commerce Amendment Bill — First Reading 
Jones Dail: Commerce Amendment Bill — First Reading 
[Volume:646;Page:15165] 
DAIL JONES (NZ First) 
: 
 New Zealand First supports the Commerce Amendment Bill going to the Commerce Committee. I believe I recently heard a comment from the Commerce Commission that it would be giving more attention to competition issues. I think that is a very responsible attitude and a very modern one—one that has been around in Europe for quite some time with the attitude of the European Union to big companies—and it is about time something like that happened more vigorously in New Zealand. 
Of course this legislation the Commerce Amendment Bill relates to provisions enabling price and quality control being imposed where competition is limited and control would be in the best interests of acquirers. The gas pipelines of Powerco and the Auckland pipelines of Vector are currently under such control. 
The reasons why price and quality control are required are mentioned in the explanatory note. The key reason given for providing for price and quality control or economic regulation is to counter the ability of firms that are not faced with competition or the threat of competition to charge excessive prices and/or reduce quality. 
I expect words like that will be music to the ears of many of the struggling families in New Zealand who constantly see their power prices going up and wonder whether anyone is trying to do something to make sure that electricity companies and gas companies do not just keep adding on and making sure their shareholders get substantial profits especially when many of those shareholders are overseas and the profits go overseas. New Zealand First is always very concerned to make sure that people in that situation do get some protection and this bill offers a strong ray of hope to those people in our community. 
Some reasons are given as to why the principal Act requires amendment and I want to mention a couple of them. The explanatory note of the bill states: “there is uncertainty about the rules governing regulatory decisions (such as the cost of capital):”. We are always against having things that are uncertain in legislation. Certainty is always important especially to a lawyer. It also states: “the lack of a credible information disclosure regime to constrain the exercise of market power by 3 international airport companies in the supply of aeronautical-related services:”. Again one is always very concerned about a monopoly-type situation where airport companies just seem to add on and add on charges to their users. Inevitably it is always the customer trying to get through the gate who has to pay despite what everyone else might say and New Zealand First is very concerned that the average traveller does not get ripped off by companies that want to make substantial profits and once again send them off overseas where they have substantial interests. 
The various forms of regulation have been mentioned such as information disclosure a negotiate/arbitrate regime a default/customised price-quality regime and individual price-quality regulation. But then the specific sectors are also referred to and I want to make a few comments about them. 
The bill states that electricity lines businesses—called “ELBs” in the bill—which are currently subject to Part 4A are to be subject to various arrangements from 1 April 2009. It is good that a select committee will be looking into these issues. I hope that all those ordinary users of electricity or gas pipelines and suchlike who complain about the Government and members of Parliament not doing something to protect their interests will take the opportunity to get their various interest groups to make submissions to the select committee. There is nothing worse than being a member of Parliament and one has put some legislation before the House and it has been passed and about 6 months later someone comes along and complains and says: “Why didn’t you do this?” and one says: “Well 6 months ago we did it. Where were you at that time?”. Of course it is always terribly frustrating when one has actually supported a particular viewpoint and people supporting the other party come along and say: “What are you going to do about it?” when one has actually done the work and the other party is opposed to it. That is always frustrating as every member of this House will know. So I hope that all those people who are interested in electricity and gas prices will take an interest in this legislation and make submissions to the select committee. 
We in New Zealand First are very interested in the situation at the airports. One of the most difficult things to do is to get information from limited liability companies that have their own rules and regulations and the provisions of the Companies Act and various other legislation to protect the disclosure of information—commercial or otherwise—and that are monopolies. As has been indicated the bill imposes information disclosures on the Auckland Wellington and Christchurch international airports from 1 July 2010. The bill is almost euphemistic when it says that these airports have strong natural monopoly characteristics. I would have thought that either something is a monopoly or it is not. But no the bill states that they have strong natural monopoly characteristics. They are currently subject to information disclosure under the Airport Authorities Act but this bill’s regime which has been explained already will set up a different form of regime that does not appear to be as harsh in the sense of the methods that have to be utilised to give effect to issues but will be faster and more appropriate in terms of the Commerce Act remedies. 
One of the things that always interests me with regard to legislation—and it is something that has not been touched on today—is the penalties. I think it is useful for the public to know that when things go wrong and people do not comply with the law as passed by Parliament there are substantial penalties that can be imposed. Just flicking through the bill I see that for example proceedings for pecuniary penalties can be commenced and some of the penalties relating to contravention of undertakings must not in respect of each act or omission exceed $500000. That does not sound terribly high but they are increased in respect of offences relating to information disclosure and regulation with fines not exceeding $200000 in the case of an individual or $1 million in the case of a body corporate. So that is getting tougher. There are also pecuniary penalties for contravening price-quality requirements. The legislation states that the amount of pecuniary penalty must not in respect of each act or omission exceed $500000 in the case of an individual or $5 million in the case of a body corporate. 
So it seems that this bill has a very worthwhile objective. It seems that the method of remedying problems is being improved and for those companies that wish to try to bend the rules there are reasonable penalties. Of course in this area there is such a substantial amount of financial gain to be obtained that one wonders whether the penalties are adequate and whether consideration should be given to inserting a penalty if a default continues on a daily basis—a daily-basis penalty rather than a broad figure. On the face of it this bill seems to be a reasonable bill and New Zealand First will support its referral to the select committee.