Turia Tariana: Commerce Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Turia Tariana: Commerce Amendment Bill — Second Reading 
[Sitting date: 02 September 2008. Volume:649;Page:18323. Text is incorporated into the Bound Volume.] 
Hon TARIANA TURIA (Co-Leader—Maori Party) 
: 
 Tena koe Madam Assistant Speaker. Tena tatou katoa. The purpose of this bill is to amend the Commerce Act 1986 in order to reform its regulatory control provisions to do with the important services of infrastructure providers of gas and electricity and the airports. As others have stated it is a complex technical piece of legislation not easily understood particularly if one has not been a member of the Commerce Committee. I have always had some issues with the concept of consumer or client as if it is a meaningful term. If we were to turn to the  
Oxford Dictionary  
to find out what a consumer is in real terms it describes services products expected to have a long useful life; goods or as in consumerism the preoccupation of society with the acquisition of goods. Well in the Maori Party we are a little bit different and we talk mostly about people—a radical concept I know.  
So we have turned to the amendments made by the Commerce Committee to see how the people have reacted towards proposals to introduce even lighter non-price forms of regulation than were previously in force. The purpose statement in new Part 4$ is to be amended to safeguard consumers from excessive prices. There is nothing we would disagree with there. In explanation the commentary on the bill describes the inherent tension in the bill with some submitters more concerned about incentivising investment than about consumer protection. The so-called solution is seemingly more to focus on profit and investment rather than as I said before to promote consumer protection. So the level of protection is not to ensure affordable prices but to limit their ability to extract excessive profits yet curiously there is no definition of what is described or defined as excessive.  
That one specific example is indicative of the emphasis in this bill which appears to be about competitive markets more than it is about consumer protections. I am reminded of the warning from American economist Milton Friedman who said: “Many people want the Government to protect the consumer. A much more urgent problem is to protect the consumer from the Government.” One of the disappointing features of the consultation process that was undertaken for this bill was that although a total of 39 submissions were received not one was from the end consumers whom this bill is supposed to protect. All of the submissions were from service suppliers and one from the Hon Justice Randerson of the High Court who was consulted for specific advice on appeal clauses.  
So really how can one protect the consumer from the Government if the people are not being heard in the first place? The Maori Party believes that there needed to be some mechanism other than submissions to the select committee to get feedback from consumers given their key role. Maybe focus groups of consumers should be considered as an important mechanism for gaining the thoughts of that group. A bill that ostensibly enables price and quality control for the purpose of improving outcomes for consumers should logically have sought the feedback of those people in the first instance. The bill would look quite different if it had consumers at the centre and if they had been guaranteed some kind of voice in the process. Failure to involve the people who are supposedly to benefit from the outcomes of competitive markets is a huge risk which works to the benefit only of the corporations—the moneymakers—rather than the unsuspecting public.  
Another key issue other than the lack of robust consultation mechanisms is the failure of this bill and indeed successive Governments to adequately regulate monopolies following the privatisation process. Dr Geoff Bertram an economics lecturer up at Victoria University stated that privatisation has been notoriously unsuccessful in New Zealand. In his contention there are many horror stories of big transnational organisations trying to buy up our infrastructure and similarly monopolies that do not care about service delivery quality or affordability but just about their profit. His conclusion therefore is that natural monopolies—public or private—need to be kept on a leash; and there is no escaping the need for proper regulation.  
What we have seen in successive Labour and National Governments is that they have failed to adequately regulate monopolies following privatisation. That has resulted as we all know in price increases reduced service quality and run-down infrastructure. I recommend to members that they read Jane Kelsey’s critique of the Commerce Act entitled  
Reclaiming the Future: New Zealand and the Global Economy 
. In that analysis Jane described the Act as one of the Labour Government’s earliest moves towards light-handed regulation. She concluded that because New Zealand has such a permissive merger and acquisition regime it needed a robust mechanism to prohibit anti-competitive behaviour and her report concluded that this was lacking.  
So we in the Maori Party came to this bill thinking the policy failure would be acknowledged but it was not to be. With the introduction of even lighter non-price forms of regulation it will be less likely that price and quality will be regulated as there will be other options for the commission to steer towards. We believe that if we do not have price regulation well then we really do not have any regulation. We do not consider self-regulation will work. Our analysis of the amendments by the select committee further underlines the effect of even lighter non-price forms of regulation in fact. So we will be opposing this bill and not on behalf of consumers and clients but on behalf of the people. Kia ora.