Bennett DavidDAIRY INDUSTRY RESTRUCTURING (FONTERRA CAPITAL RESTRUCTURING) AMENDMENT BILLFirst ReadingDebate resumed from 22 September.Hon DAVID BENNETT (National): Thank you Madam Speaker. It gives me great pleasure to support this bill on behalf of the National Party. First of all I just want to say a word of thanks and support for the Labour Party. They have a rich history of supporting legislation in this area from the formation of Fonterra to the last changes to the Dairy Industry Restructuring Act in their first term and in this second one as well. So from the dairy farmers of New Zealand that are Fonterra suppliers to the Labour Party a big thankyou for the way that you have engaged on that in the past and this is another attempt to do so here. So thank you. I think that it's good to see that—Hon Member: That's generous. Hon DAVID BENNETT: Yes it is but it is praise that is worth giving out because it actually is genuinely deserved. This bill has a few issues in it though that need to be sorted out at select committee. Previous speakers have gone through the history of what's happened to get to this point where farmers have voted on the capital structure that they want to have for Fonterra Fonterra has taken that to the Minister of Agriculture and the Minister has listened and to all accounts enabled that to happen. There are a couple of points though where the Minister has intervened more than the farmers would have wanted or expected and that's part of the negotiation process now I guess that goes on during the select committee process. As long as the select committee takes an open approach to that then I think that we will be comfortable to work through with the Labour Party to see if we can get some resolution to those issues. So one of the issues is the number of ministerial nominees to the milk price panel which increases from one to two. Now potentially that is something that you could see the Labour Party seeing as an opportunity for more Government intervention I guess in that price-setting and they may see that as something that they will not budge on. It probably isn't the end of the world to do that but it requires the chair … to be fully independent of Fonterra appointed only on the approval of the Minister" and when it gets to the stage that the panel is effectively controlled by the Minister I think that does take it beyond the safeguard aspect that the Labour Party may be looking at at the moment and into the aspect of control over a body that essentially the Government doesn't need to be involved in. The reason I say that is that the milk price is a very open market. The other suppliers out there tend to follow the Fonterra price on the ground rather than necessarily a milk price panel that comes up with a great independent price that the country can follow. The second issue is the Commerce Commission power and that's probably the issue I have the most concern around. The Commerce Commission as an organisation has a very poor history in New Zealand. If you look back on its inability to deal with major issues of imbalance in our commercial system it tends to pick on the easy hits that it can do. If any organisation needs reform it's probably the Commerce Commission in attitude approach and actually delivery and to give them more power is I think giving an organisation that doesn't understand its role and doesn't actually understand how it should fulfil that role a dangerous precedent. So I would be very cautious and I would caution the Labour members from giving too much power to the Commerce Commission. One issue that they're probably acting in at the moment is supermarkets and you haven't seen the Commerce Commission being very active in that area at all and that just shows that they're not a body that I believe we can engage with to the extent of this power that's given to them here. There are some other changes in the bill that are pretty small but the two big ones there are effectively the power the Commerce Commission gets and the change to the milk price panel. Those two I think need to be reviewed and I thank the Labour Party for supporting Fonterra dairy farmers and the dairy industry. But I'd just caution that there are two or three areas there that possibly could do with change and I look forward to that happening in the select committee."