Bayly Andrew; Salesa JennyANDREW BAYLY (National—Port Waikato): Thank you Madam Speaker. I do acknowledge the Hon Andrew Little the speaker who's just sat down—the stand-in Minister—and I think he did a great job. I compliment him on trying to sex up" I think was the term quote unquote—wasn't it Minister?—the Commerce Amendment Bill's third reading. Very important these things of course and what this bill is about is a vital part of the engine room around how New Zealand businesses can operate in New Zealand. At the outset I will say that National will be supporting this bill because we think it's vital for a small economy that we have a dynamic market where people can operate efficiently and effectively and be competitive. So that part of what this bill is seeking to do is incredibly important for New Zealand to get right. Notwithstanding that there are some issues with this bill that we have had concerns with and we certainly discussed those at great length during the committee of the whole House stage. They really relate to the two big core aspects of this bill—namely the new section 36 issue of misuse of market power and the second one is the intellectual safe havens component. My good colleague the Hon Todd McClay had put up three Supplementary Order Papers which we thought would be useful in terms of trying to refine what was in this bill to more adequately reflect and create the right playing field for businesses to actively compete in the New Zealand market place. So I just want to turn to both of these two components and I'll just address my first comments to new section 36 in clause 14. What new section 36 states is that it prohibits firms with substantial market power from taking advantage of that power for an anti-competitive purpose. Of course if you look at the business dynamics of New Zealand unfortunately we have arrived in many industries where there's two or maybe three major players that dominate the market—and I use that word in the general sense and not in the Commerce Commission sense because if you're dominant it has a whole different meaning from that perspective. But that is where unfortunately the New Zealand market place has ended up. We have these major players and then we often have a raft of mid-tier and small-tier players underneath. So to make sure we've got the right dynamic we need to have regard for what is the reality of today which is that there are often duopolies in place. The Minister referred to the supermarket study that's under way and of course there's been the fuel market study that was conducted last year. Unfortunately we haven't seen any benefit come out of that one but hopefully we might do out of the supermarket study. So what the bill does is replace the phrase "taking advantage" which is a test at the moment to move it from an intention test to an effects-based test and it has an explicit prohibition on firms with a substantial degree of market power engaging in conduct that has the purpose effect or likely effect of substantially lessening competition. Now the changes that are being put in place to some extent reflect what's gone on in Australia. Australia under Malcolm Turnbull did a review of this sector and made some changes and this is quite a substantive change. It may not mean much but it moves us from an intention test to an effects legal test. What we're concerned about is what that actually means and what it means for firms that have to now think in terms of that new test.So the Ministry of Business Innovation and Employment's view on the current section 36 is that they think it's flawed. They state that it has potential to fail to deter or penalise some forms of anti-competitive conduct; it's costly and complex to enforce; and arguably creates some unpredictability. So my good colleague put up Supplementary Order Paper (SOP) 92 which amends clause 14.So in that current wording that is going to pass through this House because the Labour Party has control of it is just rather than use the term "purpose" or "has or is likely to have an effect" just to simplify it to say "has the purpose or is likely to have an effect." So what it's done is reduce the impact or the aspect about it in terms of requiring companies to think about the immediate impact of what their actions are going to have in terms of how it's regarded from a competitive situation.So if I give you an example if a company is operating—it's a mechanical shop let's say—and offers a big discount to some of its big customers as a reward for the type of service and the extent of service that they bring to that business and if that is offered—and in effect it is a loyalty payment or a discount—this might have the unintended consequences of driving smaller truck operators—let's say in the same town or in the region—out of business because the firm has the ability to discount the price.Now in many cases that's common practice because a firm will want to recognise large customers who bring a lot of business to them and obviously discount the price. But under this arrangement what we're worried about is to the extent that it does drive the competitor out of the market then this will now be caught under this new test and we're worried about that effects-basis to this test. It's quite difficult for companies to assess what the likely impact is of certain aspects or how they're conducting their business and what it will mean for their competitors. So that's the first major thing. I think it's a shame that the House and the Government hasn't picked up the SOP that the Hon Todd McClay put up.The other one is in regards to the intellectual property aspect. I'd draw the House's attention again to the letter that was sent to the Minister but was also sent to us around the intellectual property (IP) issue of safe havens. This letter is signed by the chief executive of the Screen Association executive director of the New Zealand Writers Guild the chief executive of the Interactive Games and Entertainment Association and the executive director of the Screen Production Development Association. Basically this letter says that they are very very worried about the way that international firms will now regard New Zealand as a place to invest or to conduct business in because of the changes in the bill regarding the safe haven of intellectual property. Specifically what it says is "We worry that these unnecessary legislative changes will discourage overseas film studios from licensing their intellectual property to New Zealand; secondly it discourages international investment in the New Zealand film industry and discourages local film makers and writers from realising the true value of their creative products." It also talks about the video gaming industry.One of the most disappointing things during the debate is that I asked the Minister directly whether he had spoken to the New Zealand gaming association about these IP changes which I think are incredibly significant. We've got a growing exciting gaming industry probably worth about $300 million at the moment and it's a dynamic growth path. Obviously they're having trouble getting people from overseas to come and work here but it opens huge opportunities for our young people Māori Pasifika because of the creative skills that they bring to the gaming industry. And yet here we are we're going to pass a piece of legislation that cuts to the core of that particular industry but also the film industry and the writers. These are hardly people that are out there advocating on a scale that is unreasonable; these are people who want to see the creative industry in New Zealand flourish and we're not going to help them with this bill.ASSISTANT SPEAKER (Hon Jenny Salesa): The question is that the motion be agreed to."