Bayly Andrew; Clark DavidANDREW BAYLY (National—Port Waikato): Thank you Madam Chair. We're moving so rapidly with this bill; it's a fascinating conversation today. I just want to turn now to clause 12. This is the commission's recommendation to the Minister that a retail payment network should be designated and the Minister said earlier in his contribution before the dinner break that Diners and Amex were not part of the designation. This is set out in Schedule 1 I see at the back here where MasterCard both its credit and debit facilities are designated under the designation order; this is Schedule 1. And Visa is designated both in terms of its credit and debit products. My question to the Minister is: what's the threshold that might lead to a designation occurring? I do want to take this opportunity to correct a statement I made during the second reading that I was under the view that Amex had been effectively designated or included in the provisions in Australia and I now understand from them that that is not the case. But in light of that I'd be keen to understand from the Minister what might be the threshold given both Diners and American Express are already operating in New Zealand albeit maybe with relatively low market shares. But what is the test going to be? And I know that it sets out in clause 12(2) that in deciding whether to make a recommendation the commission must take into account the features of the retail network the nature—including the number value and nature—of transactions and the Financial Market Infrastructures Act. But really I'm trying to understand: what are the broad thresholds that the commission might look at? Do you have to have a market share of 10 percent 5 percent? What is deemed to be the point at which you might be contemplating—one of these other networks or heaven forbid we might get a bit of competition and more people although the Minister was pretty reluctant to address the question earlier about how this bill is going to bring about competition. But what are the broad parameters that would mean that a network might be deemed to be necessary to be designated? Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I note the member has asked a question in respect of clause 12. If he were to read subclauses (1) and (2) in clause 12 he might find the answer to his question: In deciding whether to make a recommendation the Commission must take into account the following: (a) any features of the retail payment network or any conduct of participants in the network that reduce or are likely to reduce competition or efficiency: (b) the nature of the network including the number value and nature of transactions that the network currently processes or is likely to process in the future: [and] (c) the Financial Market Infrastructures Act 2021 and any other regulatory requirements in … New Zealand laws that the Commission considers relevant." So it has a discretion and the Minister as laid out in clause 11 can accept a recommendation from the commission should he or she choose in the future but ultimately it's the commission's judgment about the impact on the market of the different networks that are currently in play. ANDREW BAYLY (National—Port Waikato): I think the Minister was preoccupied when I was addressing the issue. I think he was talking to his advisers. I did refer specifically to clause 12(2)(a) (b) and (c) which he's just conveniently repeated back to me. That wasn't my question Minister. My question is: what are the broad thresholds—and I use the tests around market share because presumably there comes a point—and I know this specifies the criteria that might be used but it doesn't actually give an indication. Does American Express if it had the 5 percent market share—would it be likely to be regarded as an entity or a network that would be required to be designated? That's what I was trying to get the broader picture rather than just repeating back what I've just repeated to him. Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): In response to the member as I did state before thank you Madam Chair it's at the commission's discretion and they are the experts on what's going on in the market. And of course a Minister could request that they investigate things if there is public interest in the growth of a particular network or concerns about harm or a fear of undermining competition in the market. ANDREW BAYLY (National—Port Waikato): Thank you. Well I think we got to the same result so let's move on. So in terms of the designation maybe for the listeners that are tuning into this exciting exchange could the Minister tell us how long a designation lasts for? Then in clause 15(3) it talks about "If a network ceases to be a designated network". So I'm now putting the contrary view back to him: at what point and I'm sure that the commissioner has got some jurisdiction around there—but what would it mean that a network no longer becomes a designation? So that was it. Because I was hoping the Minister might answer the question: what would mean that you wouldn't become it? And presumably it's not because you go out of business because that's self-evident. But if you get to a market share of 2 percent which I think may be Amex's at the moment and hasn't been designated would that be a type of criteria that would be adopted to remove the designation order? Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): Equally in clause 15 it states that a designation may be up to a period of 10 years so there's a clear demarcation in the bill around how long a designation will last. And of course again the member seems quite fixated on particular thresholds for different products in the market but clause 12 lays out the conditions as we have already canvassed in the debate for the commission reaching a judgment about whether it is in the public interest to designate a particular network."