Commerce (Cartels and Other Matters) Amendment Bill — Second ReadingText is incorporated into the Bound VolumeCommerce (Cartels and Other Matters) Amendment Bill — Second Reading[Sitting date: 26 November 2014. Volume:702;Page:888. Text is incorporated into the Bound Volume.]Commerce (Cartels and Other Matters) Amendment BillSecond ReadingDebate resumed from 24 June.CLARE CURRAN (Labour—Dunedin South):Given that I spoke in I think it was June on this bill it was a bit hard to—[Interruption]—so I am now picking up where I left off.Carmel Sepuloni: 5 months to finish off.CLARE CURRAN: Five months to finish this speech.The first thing I would like to say is that—and I have to admit a slight personal note here—I am feeling very excited tonight having been part of the announcement around Welcome to Gigatown to hear that Dunedin has won the Welcome to Gigatown competition now. First of all I would just like to say a huge thank you to all of the team in Dunedin for the enormous work that they put into that and a big thank you also to the four other contestants in that competition: Gisborne Timaru Wānaka and Nelson. It was a huge effort—huge effort. I have to admit that I was sceptical about this particular competition and I was sceptical about the ability to deliver what the objectives were.In relation to this particular bill the Commerce (Cartels and Other Matters) Amendment Bill there is a relationship that I am going to draw but I would like to say that first of all this is a huge kick-start to Dunedin which has suffered a number of blows which is not to say that other parts of regional New Zealand many of the other contestants in this competition are not suffering from regional decline and could have done with the $700000 innovation fund and the ability to kick-start new businesses. But the point is that—and this is where it becomes relevant—what Chorus has done through this competition is actually create competition in our community. Some members might be surprised to hear me say this but I really do applaud Chorus for its initiative around this and I want to have that on the record. I actually said tonight that I would eat my hat if Dunedin won and so now I guess I have got to. I am glad I did not say I would run naked through the Octagon. But I guess I will now have to make good on that promise.The other area where the competition has fallen down in the telecommunications environment is in the handling of the copper-pricing issue. We are waiting to hear the outcome from the Commerce Commission on this just next week around what that wholesale pricing will be. What this bill is attempting to address is the cartel and monopoly behaviour that can exist in a small country such as New Zealand where market capture can become a very serious issue. The effect of that is the stifling of innovation and an impact on small companies getting scale getting the ability to build and to export business and being able to develop. I think that what this bill—which the Labour Party is supporting—attempts to do is to take and address some of these issues. We have been through a pretty comprehensive select committee process. I acknowledge the role that the select committee has played and that the officials have played.However the point—going back to the issue around the copper network which is dominated by a very big player that has had quite a lot of support from the current Government to maintain its market stranglehold in that area and impacting in the new emerging fibre environment—is that we have not gone the whole way that we should have. My colleague Clayton Cosgrove put up an amendment in Supplementary Order Paper 408 which has been tabled in the House and is available to anybody who wants to go and have a look at it tonight during this part of the debate because we will have the Committee stage as well which is when that will get voted on. I do want to draw this very serious and important amendment to the attention of the House tonight. For those who have forgotten about this issue—and I do not know whether there are any existing members of the Commerce Committee present with us tonight—this issue was around addressing the effect of cartel behaviour not just the intent but the effect the actual impact of what actually happens in a market environment when there is monopoly behaviour or cartel-like behaviour and what that can actually mean.I think this is a really important issue. Essentially it was described by my colleague Clayton Cosgrove in his second reading speech back in June—and we are now in November. As the legislation currently stands the Commerce Commission has to prove the intent of monopolies abusing market power rather than the effect of their behaviour. The big gap in our law that has not been addressed in this bill is the effect. It is difficult to prove intent and that is where the gaps are: you can say that we cannot prove intent so therefore we cannot measure it and therefore we cannot do anything about it. So there is a cop-out that happens. But if we actually were able to it is much easier to measure the detrimental effects of monopolistic competition through their effect and that is what this amendment on Supplementary Order Paper 408 put up by Clayton Cosgrove actually does. It measures the effect. He used the example of applying the current law to the real world. He said that if he drove in a car that caused an accident that broke somebody’s legs then that would be OK—well it would not be OK—unless he was breaking the law in the way he drove if it was not his intent to do that. But the effect is that the victim is considerably worse off. I think that if you have the ability to measure effect then you are in a fairer environment and that is where we should be moving the law.In closing this speech I guess there is a big message that I have for the incoming Minister of Commerce and Consumer Affairs on this issue. The previous Minister of Commerce Craig Foss would not go near it. Essentially he kept saying: “Oh yes yes yes. We’ll have officials look at that.” The incoming Minister has been given advice. He has been given some advice around this issue saying: “Your pre-election policy plan proposed a review of the misuse of market power prohibition in the Commerce Act. Commentators have questioned whether this provision is working as intended. In addition Australia is undertaking a broad ranging review of its competition policy which raises issues of relevance to New Zealand.” Officials said: “We will brief you on the potential scope and plan for this review including the recent draft recommendations from the Australian competition review.”Well I hope that the new Minister of Commerce and Consumer Affairs is listening tonight because he is on notice. He is on notice around section 36 of the Commerce Act. The chair of the Commerce Commission the Productivity Commission and the telecommunications industry have all expressed the absolute need to reform section 36 of the Commerce Act. This Government needs to go into that space and look at how competition is working or is not working in this country. This party on this side of the House is watching and will not only be watching but be speaking out very loudly around the abuse if it is happening in competition in this country where monopolies and duopolies have got too much of a stranglehold. So I leave you with that thought and look forward to the Committee stage of the debate.SIMON O’CONNOR (National—Tāmaki):I am actually quite pleased to bring this second reading debate back to the Commerce (Cartels and Other Matters) Amendment Bill. Actually I thought that in the last contribution one of the absolutely key words was “if”. The member was saying “if there are cartel operatives” and so forth. Of course the Labour Party over the last year has tried to make a number of accusations against companies in New Zealand about their behaviours and it has not actually worked out too well. In fact over recent days Labour members have tried to make accusations. That is not working out too well either. [Interruption] One of the great things about the Labour Party you see is that as soon as you say something that hits a nerve Labour members react. It is fantastic.But as I said we come back to the Commerce (Cartels and Other Matters) Amendment Bill. What we are looking at here is an important second reading. I want to acknowledge the new Minister of Commerce and Consumer Affairs the Hon Paul Goldsmith and the work that he has done to bring this through—actually a remarkably hard-working Minister—and I am surrounded here by some of my new colleagues on the Commerce Committee including Melissa Lee who is the chair. I am looking forward to seeing this bill progress through the House.This is ultimately a bill at the heart of what the National Party believes is a way forward for our economy. It is about a strong capital market that vital source for finance to help our businesses grow. Over the last 6 years and now into our third term we are looking at ways we can adapt and change things. I was talking actually over the last 24 hours with some people in this sector and they are very keen to see this bill progress. They are keen to see that that balance occurs here between allowing pro-competitive collaboration but also making sure that we are not going to have those sorts of hard-core cartel operations either. It is a balance and I think what the select committee has done in returning this bill to the House has struck that balance and that is a certain degree of positivity that I am hearing already out there.There are a couple of elements that I just want to draw members’ attention to. The first is what is known as the prohibition. Fortunately people will probably be pleased this is not the American Prohibition. This is ultimately around how we define hard-core cartel conduct. One of the things this bill is doing is providing a much clearer definition around such things as fixing prices restricting output allocating market and things like rigging bids as well. So this bill provides a lot of clarity in this space and ultimately as those who have operated in business or who have run a business will know certainty is absolutely critical.The other element—because I am sure that other colleagues will touch on various other aspects from the exemptions and clearance regimes—is around the notion of penalties. We want to update the penalties here to make it very clear that when there is anti-competitive behaviour particularly around cartels the penalty is appropriate. The bill is introducing criminal sanctions and this is for both individuals and companies but I will not tire the House by going into the particular details. There is though I think a change if I recall correctly that the committee has introduced basically around the tension between the criminal and the civil sides.This is a good bill. I think it is a good indication of a hard-working Minister—Paul Goldsmith—who has grabbed the bull by both horns. It is great that the bill is here before us and I look forward to the furthering of the debate.JAMES SHAW (Green):I am rising to speak in support of this bill. I will not take the full call because we think it is a very good bill and we do not really see the need to delay its passage through the House.I do want to acknowledge the work that the Commerce Committee has done on this bill on reviewing it post the select committee hearings. We feel that it has actually been substantially improved over the initial version.I do think it is important to recognise that New Zealand is a very small market. I spent most of my career living in London where the New Zealand economy would sort of fit into one of the London boroughs. I just want to note that in a large market the competition and the variety of players out there will tend to mitigate against cartel-like behaviour. Moving back to New Zealand a few years ago I noticed how in pretty much most market segments there were at most half a dozen players and I also just noticed that with regard to New Zealand prices for a number of reasons but the small number of players being the main one New Zealand consumers pay considerably higher prices than people in other markets.Just coming off of that I also noticed that the international aspect of this is really important both in terms of harmonising our regime with other similar regimes—particularly Australia; I think that is a particularly good aspect of this bill—and also in that our companies are global players. They are exposed to international players as well and it is good that this bill reaches out into the rest of the world and looks at the behaviour of our companies that are operating overseas and also at international businesses that are operating here of which there are obviously very many.The issue of criminal sanctions is the one area that we are most keen on. It is pretty significant that we are placing personal liability at the heart of this bill. It is very easy to see in most of our regulatory regimes in corporate law where a company can be fined or a company can be held liable that that does not necessarily deter bad behaviour on behalf of either the directors or management. In this case because we are actually saying that individuals will be held liable for criminal offences that is going to be a significantly greater deterrent to this kind of behaviour than just maintaining a corporate fines regime.So for those reasons we like this bill. We are very happy with the work that has been done on it and are happy to commend it to the House.FLETCHER TABUTEAU (NZ First):I stand in support of the Commerce (Cartels and Other Matters) Amendment Bill on behalf of New Zealand First. The amendments arise from meaningful discussion with specialist interest groups and the ministry and I too note the work of the Commerce Committee and acknowledge Melissa Lee. These amendments look to clarify the scope of prohibited behaviour introduce new exemptions and introduce criminal sanctions for hard-core cartel behaviour. Anti-competitive behaviour is usually undertaken by the big players and it usually leads to large inefficiencies in the New Zealand market and that undermines the average Kiwi household. Mums and dads suffer as the giant corporates are able to take advantage of powers that New Zealand First would argue are currently more pervasive in New Zealand than many might think. Cartels in particular are the coming together of mutually dishonest minds to literally rob New Zealanders.This amendment bill has been a long time coming. Discussions around these changes have been circulating for years—years before the amendment bill was originally introduced in the House. The backbone of this country’s economy needs to be and must be healthy competition. When organisations from different countries from different borders collude—and also as New Zealand businesses collude with one another—to increase prices or fix output they are stealing from New Zealanders. This kind of theft must be stopped. We must do all we can to look after our New Zealanders. Further to this when cartels are allowed to operate they literally steal from families’ time. They not only steal income but they steal the efforts of hard-working New Zealanders who must either work longer hours or work more jobs in order to provide the basics for their children for example.The bill’s definition of a “cartel provision” found in section 30A inserted by clause 7 is “a provision contained in a contract arrangement or understanding that has the purpose effect or likely effect of 1 or more of the following in relation to the supply or acquisition of goods or services in New Zealand: (a) price fixing: (b) restricting output: (c) market allocating.” The bill proposes sensible and meaningful amendments but we must ask ourselves whether the amended law will be enough to empower the Commerce Commission. Is the Commerce Commission adequately armed and adequately resourced to be the watchdog that this country needs to ensure we quash anti-competitive behaviour?Just a week ago the Commerce Commission made public its findings with regard to the complaints received from dozens of individual complainants directly to the Commerce Commission itself and dozens more through the Food and Grocery Council. Normally when this many individuals come together that would be an indication of a serious problem but instead the Commerce Commission found no wrongdoing. It certainly raises questions in my mind. In New Zealand we are a country that seems to encourage large players in a diverse variety of markets but importantly we can sustain only a small group of them which is what the previous speaker James Shaw was alluding to with his examples from England. The nature of our geography and the size of our country—these two factors in particular—seem to combine to create natural breeding grounds for these oligopoly or duopoly entities.So I stand here as the voice of New Zealand First in this area and say that we cannot allow any firms—or especially any group of firms—to abuse their market powers. We must empower our commission with the tools and the teeth it needs to ensure that large firms behave in the best interests of their customers. I question the availability of flights within our country especially in our regions. I question the cost of milk within our country. I question the cost of many household items. I question the cost of our electricity. We cannot afford to stand by and let large players in essential markets especially take advantage of their power to the detriment of New Zealand households—to the detriment of our Kiwi mums and dads and their children. I personally get angered when two or more large corporates can presume to join together illegally to undermine markets and the New Zealand economy.However on the other side of the same coin New Zealand First always looks to support good legislation that will encourage businesses to work together for the betterment of New Zealand households. I note that one of the previous speakers said it was a balancing act. It is not actually a balancing act; it is about having clear and decisive legislation. It is about laying down the law and establishing what those boundaries are because if you do that correctly it does not have to be a compromise; it is one or the other.There has been a history of good New Zealand businesses wanting to work together in New Zealand. When businesses want to work together for the benefit of New Zealand households our legislation needs to encourage and support this. It has been long discussed that the original bill in its current state uses ambiguous language that actually deters cooperative behaviour on the part of good New Zealand businesses. The bill would allow for the lessening of competition in the New Zealand market as long as the bill gave rise to efficiencies that benefited the end consumer—for example a lower purchase price.New Zealand First is all for good business practice. If businesses knew that by joining together for a bid on a large contract for example they might create synergies and thereby lower their costs as well as benefit the end consumer then this does need to be encouraged. But when companies work secretly together to collude and fix prices artificially to restrict supply which essentially has the same effect of increased prices then we must ensure our agencies are adequately equipped to stop this.What New Zealand First asked for and now sees in the amendments is the provision for criminal sanctions for hard-core criminal cartel behaviour in particular. There must be a large burden of proof in order to proceed with criminal sanctions—we acknowledge this—but individuals who intend to engage in conduct that seeks to undermine markets and essentially rob from New Zealanders must be pursued and must be held to account. I note that many of our trading partners have already moved down this path and in discussions it was noted quite cynically that should organisations wish to collude with one another across borders it would seem at this stage at least that New Zealand is still an economy where a cartel arrangement can be entered into without much repercussion.These organisations were clear in their analysis. When weighing the risks it was worth attempting to contravene New Zealand law by entering into these cartel arrangements. The disincentive is currently not there. It is currently not enough to dissuade this behaviour. The OECD noted the detrimental effect of cartels on society throughout the world. The effects of cartels on economies are wide reaching and have a negative effect on economic efficiency. The OECD acknowledges that cartels by raising prices above the competitive level and decreasing output have the effect of making consumers either pay a higher price for a product or actually forego the product entirely. We all know that we as consumers miss out and we are being literally robbed when we allow cartels to operate on our shores.There are also good business arguments actually as to why we should fight this anti-competitive behaviour so strongly. When a cartel is able to raise its prices it is actually undermining the efficiency of the markets in which it operates so our very limited resources are not being best directed to their most optimal allocation. A cartel will protect its members from real competition from those honest practitioners not in this cartel behaviour. This allows inefficiency in a market and allows for slow or no improvement in productivity. Investors are sent signals by those cartels that are inherently incorrect and so investment flows in directions that it otherwise might not. If you own the market you are literally less inclined to be innovative to look for increased efficiencies to reduce costs or to increase quality.I note in finishing that the counterfactual test in section 36 of the Commerce Act is logical. When good minds apply their thought it looks on the surface like a fair test. However it is insufficient in and of itself. There is much international precedent for it to be discontinued. In fact Australia the only other major trading partner of ours that still uses it acknowledges that it is not the only tool it uses to take measures against anti-competitive behaviour. As we move into a framework for criminal sanctions especially I suggest we must employ a tool that our trading partners consider to be equally robust.Additionally the new measure whereby the legislation is currently asked to focus solely on the outcomes—and the Labour member spoke well to this—has the effect of essentially missing the point. The amended bill can now focus on the form of the conduct that is illegal in and of itself. This provides a simpler test with which to establish intent to collude. I commend this bill to the House.MELISSA LEE (National):I stand to commend the Commerce (Cartels and Other Matters) Amendment Bill in its second reading and to support it obviously. I would like to begin my contribution by actually giving my congratulations to the previous Commerce Committee members who had done a terrific job with the bill before Parliament ended in the previous term of Parliament. I see in the record of the members who are listed there that the Deputy Speaker the Hon Chester Borrows was actually part of that select committee. I would like to commend the then chairperson Jonathan Young who has done a terrific job in the Commerce Committee. I hope that I can actually live up to his high standards and expectations in our new term of Parliament.There are many members who have actually risen and spoken in favour of this bill and I just want to say a very quick word. Strong capital markets provide a vital source of finance to help our businesses grow and actually create jobs and that is what this Government is actually focused on. They are central to improving the financial well-being of all New Zealanders. We want to ensure that investors have the confidence to invest and that capital markets can broaden and deepen their base and appeal and we want to lift innovation. National is moving the economy towards savings and productive investment and away from borrowing and spending. The Commerce (Cartels and Other Matters) Amendment Bill promotes economic growth by enabling pro-competitive collaboration between firms while also deterring hard-core cartel conduct and that has to be a good thing. I commend this bill to the House.STUART NASH (Labour—Napier):I must admit that I was a little bit concerned when I heard the new chair of the Commerce Committee Melissa Lee giving that very brief speech around what National is doing in terms of deepening and broadening capital markets. I might be wrong but I thought that member actually said that the Government is moving to put in place mechanisms that drive spending away from borrowing and into saving. The way I read things the reason we have got instruments like loan-to-value ratios in place is that New Zealanders have such a love affair with investing in the non-productive sector like housing in Auckland that we are in big trouble. In fact our capital markets are so narrow that our own superannuation fund feels the need to invest offshore because if it invested all of its money in New Zealand it would create such a distortionary effect as to completely stuff up our capital markets.I would say that there is one thing that the Government could do—and I think I have heard Mr English say this; I could be wrong—that would actually have a massive impact on broadening and deepening our capital markets and that is tax reform in a whole range of areas. But that is a conversation for another day.At this point we are talking about the Commerce (Cartels and Other Matters) Amendment Bill. It is a very important piece of legislation. As you know yourself Mr Deputy Speaker being a former chair of the Commerce Committee all parties in this Parliament have worked together to really tighten up the legislation around capital markets and business practice in this country. A lot of that was actually started by Lianne Dalziel when she was the Minister of Commerce and she put a lot of legislation through. To be fair to the Hon Simon Power when he was the Minister of Commerce he picked up a lot of this legislation and was I would suggest probably the hardest-working Minister in that Government when he was here. I think I remember at one stage looking at the Order Paper when he was the Minister of Commerce and a third of all bills on the Order Paper were sponsored by Mr Simon Power.I suppose this is why it is a little bit disappointing that I am speaking on this bill. By that I mean that this bill was introduced in 2010. I took a little bit of a break—had a bit of a sabbatical for 3 years and then came back—and of course this bill should have been well passed before I got here.Hon Member: Sent on holiday.STUART NASH: Sent on hiatus. I went and had a bit of good time and spent some time with my kids and my family had some more kids another wife and then I came back. I would have thought that when this bill was introduced in 2010—in fact it was introduced when I was here the first time. I probably spoke on it. This bill should have gone through. It really should have. It sat on the Order Paper. It had its first reading in 2012 was reported back in May 2013 and here we are doing its second reading now. It has taken too long and I think there is probably acknowledgment from that side of the House as well that it has taken too long but it is here now thank goodness—better late than never.There is one thing that we really need to do in this country if we are to attract the sort of investment that we need and that is to really tighten up the rules and the regulations around doing business in New Zealand and that is to do with our capital markets as well. I remember when I was working at Fletcher Challenge and I was speaking to the chief financial officer. He was an American chap who had worked a lot in the big American companies and he said that when he first came over to Fletcher’s and went around the world seeking capital investment into Fletcher’s he was told by a number of overseas institutional investors: “Why would we invest in New Zealand? It’s like the Wild West.” That is the sort of overseas reputation that New Zealand had at that point in time. This was the mid to early 1990s.I am very pleased to say that we have moved a long way since then but I think what we saw with the global financial crisis and the collapse of the vast majority of mezzanine finance companies was that we still had a long way to go—we had a long way to go. But this is one of the bills that is just getting us there.There is nothing more insidious than cartels. If I may say I suspect one of the reasons that this bill has taken so long to get here is that I often say that one of the big differences between the National Party and the Labour Party is that the National Party believes that the market has the outcome—leave it to the market and it will deliver optimal results for New Zealand. But what the Labour Party believes is that when there is monopolistic behaviour going on or cartel behaviour or behaviour that is occurring to the detriment of New Zealanders the Government has a very important role to play in that. This bill in a way addresses that to a certain extent. But my personal view is that the Government should be playing a much stronger role in in fact knocking monopolistic behaviour on the head well and truly. What that would do is really serve the interests of a whole lot of New Zealanders who are struggling out there at the moment.We have just had a report back from the Commerce Commission around supermarket behaviour. It did not find any sort of price fixing or any coercive behaviour going on but the fact that so many people reported or submitted to the Commerce Commission on this said that it does not smell quite right. I suppose again this bill sends a signal to any organisation that may be tempted to engage in cartel behaviour that we are watching you—we are watching you. And if an organisation engages in cartel behaviour and it is proven—and look let us be honest about this: the test is actually not that high—then it will be absolutely nailed.The thing I also like about this bill is that it holds people personally liable. So directors or chief operational members cannot escape prosecution if they have knowingly behaved in this sort of way. You know I suspect we can all think of industries that we have long suspected of operating cartel behaviour but proving it is a little bit different. I mean as we all know when we drive down the street we often wonder why the petrol is the same price at Caltex Shell BP and Gull and all those petrol stations. Some of us scratch our heads and go: “Well goodness me I wonder whether these guys catch up behind closed doors.” I suppose it is a little bit different because the Shell guys can drive down the road and they can see exactly the same thing so it is difficult to get a truly competitive pricing model in the petrol market because it is such a commodity and they do advertise their prices in the most public manner.But there have been a number of cases and I recall one having worked in the forestry industry where the Commerce Commission has taken a good hard look at some behaviour and in one instance—and I will not mention it in the House even though I am allowed to—it went very very hard against a major New Zealand company that was operating what the commission believed was a cartel.Anyway the purpose of this bill is to amend the Commerce Act 1986 to introduce criminal sanctions for hard-core cartel behaviour. It does make a number of other amendments including the provisions to govern jurisdiction and other penalties. We do operate in a globalised economy at this point in time and that just makes it easier for cartel behaviour to take place. It does not have to take place in New Zealand—it can take place overseas—but if it impacts upon the New Zealand company in any way shape or form believe me our regulatory bodies will find them and we will take the steps.What is a cartel? We often think of a cartel as five or six or seven companies operating together but actually the description of a cartel is that it can be between two or more businesses that regulate output fix prices and in general make the market less competitive. And in this day and age where that gap is growing at a huge rate between the few at the top who are doing incredibly well and a growing number down the bottom who are not anti-competitive behaviour just makes it that much more difficult for people to actually survive let alone get ahead.The banned cartel conducts include price fixing. What price fixing is—I think we probably all know what it is—is when companies agree to set a set price or a discount. Again that can happen behind closed doors it can happen offshore but if it affects the competitiveness of the New Zealand market then we will crack down on it. They include restricting output. This is a common practice where they say: “Well OK there is too much supply. Let’s restrict output and force the price up.” But it is an agreement between two companies to do this. It is not an agreement that is made in isolation given the market variables; it is done in collusion. Market allocating—that is an agreement to pursue other customers. Again I have been involved in industries where I am sure this goes on and it has got to stop. I am not saying it still happens because I was involved in those industries a little while ago. And bid rigging which is agreeing on prices to submit for tenders.The reason this bill is so important is that as we rebuild New Zealand’s second-largest city we need to have absolute confidence that it is being done at the best possible price in a manner that is completely legitimate. By that I mean that I think we would be absolutely horrified to find that there had been cartel behaviour going on in such a massive project. There has not been a project as big as the rebuild of Christchurch and I can imagine it would be tempting for some industries to sit down and engage in the sort of behaviour that New Zealanders find reprehensible. So this is a very very clear reminder and a very clear signal to those organisations that this sort of anti-competitive behaviour will absolutely not be tolerated.The great thing about this bill is that every single party and member in this House agrees with it. That is why I commend this bill to the House. Thank you very much.BRETT HUDSON (National):I am delighted with this bill. It is clearly taking on the evils the worries and the concerns around hard-core cartel behaviour but I am really delighted to see that it acknowledges what it refers to as pro-competitive collaboration between firms. In the industry I have been in for 20 years we call that co-opetition where firms will be working together with complementary technology and services to bring benefit to their shared customer. That is co-opetition. But the next day they will be fierce competitors fighting and fighting each other for another customer. In both situations those customers benefit.It is wonderful to see that this bill recognises that both states can exist in an open market such as the one we have and it in fact reflects the way the market will continue to evolve. But it does address the negatives of cartel behaviour and it is important that it does so because if it did not we could end up with that terrible situation where the tiny minority—the nameless and the faceless—are controlling outcomes delivering things that the many do not want. I would not be at all surprised to learn that Grant Robertson supports this bill. I commend it to the House. Thank you.Dr DAVID CLARK (Labour—Dunedin North):What a fine point for the member Brett Hudson to make—about the nameless and faceless operators that drive bad behaviour in our markets. The parallels here today are both ironic and striking. The Commerce (Cartels and Other Matters) Amendment Bill is about the properly regulated flow of information in markets. Markets generate efficient outcomes. They make sure that investment behaviour drives the best of possible outcomes for investment and for productivity for the betterment of our society. Well we have a political market place right here in New Zealand that has been subjected to some awful awful awful cartel-like behaviour in recent days. As our leader said today we need to cut that crap. We need to get on with regulating the political market just like this cartel market is being regulated because when cartels are protected they create inefficiencies and information flows that are not transparent that are not clear and that are not in the interests of our country. Today we have had a Prime Minister be dragged back down into this House to admit that he misled the House when it came to whether he had been in touch with Cameron Slater the blogger. He has been practising dirty politics out of his office. He has been dragging in Jason Ede who is two doors down from his office. We see that John Key has been donkey deep in creating a political market that behaves like a cartel that ensures that the public is not seeing good information and that is involved in a publicly funded smear machine that has driven a bad outcome. New Zealanders are now realising just how dirty this machine has become and what a new low has been plumbed by this Government when it comes to transparency and appropriate behaviour.This bill has been around for 4 years and it is no wonder with a Government that does not value transparency with a Government that hates transparency that likes to see monopolies prosper and that likes to see rules in favour of those who have power already rather than an open market that generates efficient outcomes. It is no wonder the bill has languished so long on the Order Paper—it is clearly paralleled in the behaviour we have witnessed in this Parliament. We have a Prime Minister who is prepared to be very very limited in his telling of the truth right here in the Parliament—Mr DEPUTY SPEAKER: Order! The member will resume his seat. This is a fairly narrow debate on the bill that is before the House. Other speakers have managed to stick within those parameters and I remind the member that the duty is on him to do the same.Dr DAVID CLARK: I will come back to the point which is that we need properly regulated markets. We need markets for information be they for political information or for typically commercially driven information like the kind we might find on a stock exchange markets that are clear and transparent and make it clear that the best information is being shared. This is so that people can make wise decisions on the basis of that information. They can form judgments on the basis of information that is shared clearly that is shared honestly and that is shared in the interests of the market it is serving. That is what this bill is about.For those who do not observe the behaviour that is expected by regulators we see some tough penalties in this particular bill. Imagine if those who traded in information incorrectly and misled the markets were facing these penalties—all markets not just the markets we are discussing right now: civil penalties of up to 10 percent of turnover during the period of cartel conduct criminal penalties of up to 7 years’ imprisonment; $10 million three times the commercial gain or 10 percent of turnover. These are strict regulations that the Government has been sitting on for 4 years for those who breach proper process for those who do collude to form cartels and this kind of sharp measure is good to introduce. It is good to ensure we have efficient flows of information and properly regulated markets and that should be true no matter where we look. It should be true whether we look here in the narrow point we are debating or whether we look more broadly in the political environment.Joint ventures are captured by this bill. The Commerce Commission has looked broadly and introduced a bill that we will be supporting. It is a bill that as I said has been dragged through very slowly. It was started many moons ago by Minister Foss I think if memory serves me correctly or it might have even been before his time.Stuart Nash: Simon Power.Dr DAVID CLARK: Right back to Simon Power—so that explains as I heard my colleague say earlier that the intent of the bill is good. A hard-working Minister brought it into the House but this Government has been very slow to move it through because of its distaste it seems for the measures in the bill. Right now Government members are under pressure. They are under a lot of pressure to make it look like they are interested in regulating the market appropriately and so they are putting this bill through this evening. But the public of New Zealand is becoming increasingly suspicious of this Government and its disturbing practices. It says yes when it means no. It says no when it means yes. We are beginning to wonder what on earth it really stands for. The public of New Zealand is no longer clear as to whether this Government can be trusted and that is on the basis of slow slow progress of bills like this and the events that we have observed today which I am not allowed to discuss at length in this speech.I do not have much more to add other than to say that Labour will be supporting this bill. The bill does make some good progress albeit slow. Goodness knows when we will see the next stages of this bill in the House. I wish the Prime Minister would be more upfront with this Parliament. That is all I have to say for this evening. Thank you.JOANNE HAYES (National):Kia ora Mr Deputy Speaker. I stand to take a call on this bill and it is a very short call. I am so pleased Mr Deputy Speaker that you stopped the previous member from blubbing for 10 minutes because I would have got so very very bored with it. I am also very pleased that everybody in the House is agreeing with this bill. It has taken a wee while to get here but the point is it is here and we are moving on and I commend it to the House.Bill read a second time.