Hudson BrettCOMMERCE AMENDMENT BILLIn CommitteePart 1 Competition studiesBRETT HUDSON (National): Thank you Madam Chair. It's a pleasure to rise and talk on this Commerce Amendment Bill particularly Part 1 which is the most contentious part—a part which the National Party had issues with when in Government and it has continued to espouse those in Opposition. The issue with this particular section is not the ability to undertake market studies or competition studies as the Commerce Commission prefers to term them; it's not any sort of reluctance on our part to inquire into the good workings of industries and markets across New Zealand.The issue we have long held is around the decision making for when those studies should be undertaken and who should approve them. In particular it's an issue of governance and indeed actually of management of the budget that the Government has set out for these studies. The Government has allowed across each of the next three Budget years $1.5 million dollars a year for the undertaking of market studies. But then we would argue it poses quite a significant challenge if more than one party is able to independently initiate them and that is because when giving evidence in the select committee stage the Commerce Commission pointed out that a market study would be expected to take at a minimum $1 million of resource to undertake and they were very clear that in their view the budget that had been allowed would permit only one market study to be undertaken per year.That being the case if the Government decides it wants to undertake a market study—and they have clearly indicated they want to do at least one—and the Commerce Commission of their own volition determines that they also want to undertake a market study well there's not enough money in the kitty to do both. So actually the bill doesn't have a mechanism for determining who gets priority if both wish to undertake a study in the same financial year and there's not enough money to go around. But more to the point it creates a bit of a mess of the management of that and I would argue and we would argue that the mere fact that that potential mismanagement that potential confusion could arise is itself deeply unhelpful for confidence across our business communities. They don't quite know where they're going to get hit and who from or indeed if from more than one angle at once across multiple markets.Our position all along has been—including when we were in Government—that only a Minister should initiate those market studies and we know this. It's actually quite troubling in more than one sense because in consulting with my colleagues here on the background to this bill although it's had amendments at the select committee this is still largely the bill that officials have tried to push over a long period of time. The officials actually took every opportunity at every change of Minister including changes of Minister within the same Government to rehash the same approach. Under Minister Foss there was an approach that was not agreed to. Then under Minister Goldsmith they tried to reintroduce the same provisions and that wasn't agreed to. Under Minister Dean they tried again and under this Minister of Commerce and Consumer Affairs they have tried at least—well it would appear to be at least—a fourth time.Despite every other time being knocked back we had officials try and try and try again until they finally found a Minister who would acquiesce to their desires. But in doing so it introduces risk to our businesses and risk to our business confidence which as we well know has been trending very very poorly under this new Government. So I would encourage the Minister to take that into consideration. We think it would make it more difficult to manage and be potentially messy while not actually adding any more value. We would by no means get any more novel studies or any more studies than we might otherwise have. They would be no less comprehensive no less effective and no less valuable in the outputs and the recommendations they might bring. It would simply be more than one vector of attack if you will and that is not necessary if it's not adding anything.So to that end I have tabled Supplementary Order Paper (SOP) 139. It is quite a simple one. The Supplementary Order Paper merely adds a couple of provisions—a provision that says that when the Commerce Commission is going to self-initiate one of those market studies or competition studies if they prefer to use the term that that must be approved by the Minister. This way—one simple provision—means we have the same ability to investigate across markets undertake the same level of research undertake the same depth and comprehensive breadth reach the same conclusions and make the same recommendations but do it in a way that doesn't create confusion—[Bell rung] Madam Chair?CHAIRPERSON (Hon Anne Tolley): I call Brett Hudson.BRETT HUDSON: —and removes the potential confusion that could be present if we've got multiple forms of an issue or multiple vectors of initiation. There is actually another reason too—which is why I asked for the second call—to delve into why it is a very good idea that there either be ministerial-initiated studies or at least ministerial-approved. And that is because officials in the departmental report provided us with information about how our closest neighbours operate in this area of market/competition studies. The Australian Competition and Consumer Commission (ACCC) do already have the power to undertake market studies—they have the power to self-initiate them too—but here's the key difference: where the ACCC self-initiates market studies they do not have the ability to compel businesses to provide them the data they want. It is completely voluntary. They cannot force them to provide certain data nor in certain formats nor to certain extents. They make requests; the businesses voluntarily choose to comply and oblige with those responses or they choose not to. Not surprisingly the information from the ACCC through our officials shows that in some instances the ACCC believes that that has resulted in them receiving suboptimal levels of information but it has definitely had a much lower impost for each of those studies on those market participants on those businesses.Where the ACCC is able to invoke compulsion for the acquisition of data ministerial approval is required in every instance. Where they exercise the power to compel businesses to provide them data that must be accompanied with ministerial approval. So my question to the Minister is: why are we so different? Why should we be different? Why when we are in a sense copying to one degree or another the ability to undertake market studies where we harmonise so many other regulations and approaches across the Tasman why do we persist in operating a model that is different to theirs? Their market isn't about market studies or not market studies; it's about whether the commission has the ability to compel businesses to provide the information they want. In Australia where they self-initiate market studies the commission there does not have the ability the authority to compel the provision of data. We do in our market studies and this piece of legislation requires it. We have that compulsion. We don't disagree with that. We think that's actually an important factor to make sure that these competition studies—market studies—would actually work well. But we also contend that like in Australia where that is the case that should require Ministerial approval. That's why Minister if you can't—well by all means tell us why we should be different to Australia in this matter. But that's why I encourage the Government to support my Supplementary Order Paper. It is a sensible one. It doesn't add any enormous process cost weight or time. It doesn't affect the nature of the studies or the time it will take or their findings. It simply makes sure that the Minister—or Cabinet through that Minister—appreciates the level of impost on businesses of a very comprehensive study. Because the Commerce Commission made it clear in their evidence that it will absolutely be a comprehensive study across a broad range of market participants. They will not do market studies by half measures. These things will be large. They will be long. They will be expensive to the Government and equally they will be hugely expensive to large medium and very small New Zealand businesses. So I encourage the Minister and encourage the Government to take a deep breath on this one. The action we take here which we fundamentally support—this idea of market studies—has enormous impacts on New Zealanders and New Zealand businesses particularly the small ones. It is absolutely appropriate and we would argue right that Cabinet through the responsible Minister should reflect on each study including those the Commerce Commission might put forward itself reflect on the level of impact that the study will have on New Zealanders and New Zealand businesses and either give it the stamp of approval or reject it. Minister I call on you to support the SOP.