McClay ToddHon TODD McCLAY (National—Rotorua): Mr Speaker thank you. The Minister's not taking his job seriously with his comments at the end here because competition law is important. There's not a single party in this Parliament when in Government that hasn't looked to have good competition law. And for him simply to say let's see whether everyone agrees with him suggests that either he thinks that he's the only one that knows best when it comes to competition law—and if that is the case he needs to talk to competition lawyers who have a range of views on this issue about how to get it right not just what the Government's doing—or actually he just wants to bring a simplistic political argument to what is an important debate.The reason this is important is if the Government gets it wrong ultimately businesses and consumers will be harmed. Competition doesn't just go one way and if the Minister thinks that actually without these changes large companies are going to be bad in New Zealand he should get out and have a closer look at the way that our economy operates. It's not just good enough to say Australia's doing it so we should do it here because the Australian market is very different than New Zealand both for consumers and for businesses. They have many much larger businesses than we do in New Zealand and when it comes to intellectual property particularly rights holders who want to bring things in from overseas it is a more attractive market than New Zealand is. So when we look at this law we need to balance out what's best for consumers so there is competition which is lower fairer prices but at the same time not just assume as the Minister has suggested with some of his comments that actually making businesses not undertake normal business practice will achieve that. And so we are supporting this but we'll be bringing forward Supplementary Order Papers (SOPs) in the committee stage to make what we think are small changes but practical ones that will achieve what he wants to with the legislation but actually not create uncertainty and in many cases not alter behaviour so that consumers will be worse off.The three areas particularly we will focus on are the areas that the Minister has mentioned in his intervention and it comes to effect or foreseeable consequence for a dominant player in a market and their activities. Currently the Commerce Commission says it's too hard for them to get prosecutions when they believe somebody has wilfully or purposefully been anti-competitive with their practices and they've said that's a result of the interpretation of the courts. Now there are two ways to look at this. The Commerce Commission is saying It's a bit hard for us to do our job" so they've asked the Minister to make it easier so they can get prosecutions or the court has interpreted differently than Parliament intended when it passed this law a long time ago. The Minister hasn't said which of these two he thinks is the issue he's just come forward with what I believe is a sledgehammer that actually will tilt the scales too far in the other direction. And if I accept for a moment the Commerce Commission's view that it is too difficult for them with existing legislation to seek prosecutions and therefore they're not taking the cases that they would otherwise there is an imbalance against them towards large business practices what the Minister is doing is creating an equal imbalance in the other direction against businesses. So currently for the Commerce Commission to seek and gain prosecution they need to demonstrate that a business with a dominant market power had the intention of acting anti-competitively and to harm others. I remember asking the Minister when he came to select committee around this legislation his views of Air New Zealand as a dominant player and what that meant in as far as their activity and pricing and so on is concerned and he wouldn't offer an opinion at that time over Air New Zealand. But ultimately Air New Zealand would be captured by this legislation if the effect of them offering cheaper prices to consumers as a result of trying to stimulate travel post-COVID had the effect of harming other companies. Now it wouldn't be their intention to do that but it could be the effect of doing that in which case Air New Zealand would say "Well under the Commerce Act we take our responsibility seriously. The Government must be sending us a signal that they don't want cheaper rates for people to fly at different times of the year so we won't do that." which means that New Zealanders would pay more when they travel. The SOP that we'll bring forward will actually not alter the intention of the Act but it will also mean that if there is an intention or foreseeable outcome of anti-competitive behaviour then they can't do it it is against the law but if the effect is that it has harmed somebody else but it wasn't foreseeable or it wasn't their intention then prosecution shouldn't be able to be brought against them.I take the case that actually this certainty will be good for consumers. If you take a truck manufacturer or trailer manufacturer that has a reward scheme for businesses that have given them a lot of business—a loyalty scheme over an extended period of time—it is not their intention to alter the market it's to reward good customers because of a good practice that they have with them a good relationship and if that is in as far as incentives and pricing and so on then actually that could distort the market or there could be someone else locally that's not able to offer the same conditions who would be harmed and that would mean under the legislation the Minister's brought forward that company couldn't do that and therefore the price would be higher for a longstanding client. That can't be the intention of this to alter normal business practice. It should be where someone has the intention to distort a market to harm others or it's foreseeable that their actions would that should be against the law not the effect of them doing something that a normal business practice is. And so we will seek to bring forward an SOP not to alter the intent to make sure we have good fair competition here but also to protect normal business practice and at the same time consumers because where businesses have to become more cautious than we would want them to be otherwise or make different decisions because of uncertainty created by the law it is the consumer that will be worse off—it is the consumer that will be worse off. Certainly that's the case with airlines. It'll be the case with many things.The second area here is around normal business practice. There will be normal business practices that actually won't be possible any more under this law and that shouldn't be the case because they are normal business practices. A large firm does it it's not OK; a small firm does it it is OK? That doesn't make sense. There'll be a number of normal business practices actually that should be exempt from this and it's a very small change that would allow that to give certainty. The reason for that is not to protect large businesses or large enterprises as the Minister fancifully is trying to suggest those who have a different view than him are trying to do it's not about protecting any businesses. It's about a fair level playing field when it comes to competition law and actually people having certainty both in business and better results for consumers. So we'll be seeking changes there.The third area where we'll be seeking changes will be around the IP protections. Minister I think that officials have made the case but I think they have got it wrong here. There are reasons in a small economy that we would want to keep the existing protections that are there. They should be safeguarded because they were put in place to help a small industry to get on its feet in New Zealand and it is still a small industry and they need that protection. I do note in the US and the EU they provide IP protection already. They haven't taken it away it is there and New Zealand therefore would be an outlier. We would make a decision that is different than many other larger economies of the world and we could well suffer in that. If we were as large as them it would be different but those who have rights over intellectual property when it comes to software as an example don't have to come to New Zealand. We are not larger enough that they will care enough about us. There must be a middle ground here that provides a protection but also allows competition or fairness in a market place and merely taking these away won't achieve that. In effect I think those that came before the committee and spoke of their concerns were not doing so to protect their own positions. They were experts in the field and said this will be the consequence of this change. And so I do think Minister I'd ask you to go and have a look at this not from a political point of view not for a fight but to get it right because actually if harm is done through this legislation if a future Government was to reverse it and change it in the intervening period of time that harm cannot be fixed.National proudly supports good positive strong competition law. In fact much of these processes were started under us and have come forward under this Minister. But actually competition law is complex. Many countries of the world have got it wrong. New Zealand actually should not be an outlier. We should not be at the front of the queue. We shouldn't just be doing things because Australia has. We should be doing things that actually are right and fair for New Zealand which includes very strong rules on large companies with a dominant market position who do not act appropriately who have the intention to use their large position to better themselves but when it comes to normal practice and certainty we shouldn't be penalising them because if you penalise them and make it too difficult Minister ultimately it is the consumer that will pay through less choice or through higher prices."