Young Jonathan: Commerce (Cartels and Other Matters) Amendment Bill — Second ReadingText is incorporated into the Bound VolumeYoung Jonathan: Commerce (Cartels and Other Matters) Amendment Bill — Second Reading[Sitting date: 24 June 2014. Volume:699;Page:18853. Text is incorporated into the Bound Volume.]JONATHAN YOUNG (National—New Plymouth):Well I think just in response to the comments of the honourable member Clayton Cosgrove it is important to understand that the regulator is doing an investigation that must not have political interference and so the Minister of Commerce has made it quite clear that this situation is in the best hands and the proper hands and the appropriate hands. I believe that in due course we will hear back from the Commerce Commission.The Commerce (Cartels and Other Matters) Amendment Bill here in its second reading is one of those bills that are full of complexity. On the one hand we want to allow pro-competitive collaboration between firms but on the other hand we want to deter anti-competitive hard-core cartel conduct. We want to encourage that sort of cooperation where firms can work together. I think that the underlying test is that it must be of benefit to the consumer and not have predominant benefit to those who collaborate.Obviously in collaboration there is benefit. But in terms of competition we know that competition is a process of rivalry between firms. Firms compete on the basis of price and quality to sell products to customers. The process of competition between firms drives firms to lower costs improve quality or develop better products in a competitive market and these benefits are passed through to consumers.Cartels on the other hand are formed when rival firms agree not to compete with each other by fixing prices or restricting output or allocating markets or rigging bids. Cartels allow firms to raise their prices above the competitive level without fear of losing customers to rivals. This increases the profits of the participants but it does nothing to create a countervailing benefit to consumers through more efficient business operations.So those are the two positions that the Commerce Committee investigated and heard about through submissions that came to our committee. We heard 16 oral submissions even though we received 41 submissions in all. We also received advice from the Ministry of Business Innovation and Employment and from the Ministry of Transport particularly around shipping and of course airlines. One of the things we have been relentless on is working through the whole suite of Acts of Parliament that have needed to be updated in order to be fit for purpose for a modern growing economy.This bill is very important because we know that if we can strip out unnecessary costs in our economy then the benefit that is going to come through to our economy is going to translate into businesses being able to afford to employ more people and being able to give a stronger and more secure future for their employees. That is because the margins of their profitability will increase. It is important that as companies look at their bottom line we have an environment where competition causes them to become more efficient.We have to compete not just here domestically but globally. We have to become a country that competes efficiently and effectively. We have to have companies that can compete against companies in Australia in Asia in North America and in Europe. So if we are hampered and held back by anti-competitive behaviour that continually inflates prices makes the cost of doing business high and passes down those costs to consumers then what we are going to find is that the inefficiency in our economy is going to take away our competitive edge.We are a small nation. We are always faced with the tyranny of distance. We are an export nation so the efficiency of our companies is paramount. I believe that in this bill we have found a good balance. Companies can cooperate together and work together knowing they are all part of the supply chain of a product or service and they can do that in such a way that the consumer benefits. We have also found a balance where we can identify those companies that are anti-competitive and have cartel behaviour. The Commerce Commission has been given a set of tools to be able to work in this particular area.I am very pleased to stand in support of this bill. I want to thank the members of the Commerce Committee for their hard work on a very important piece of legislation. I commend this bill to the House.