Hudson BrettBRETT HUDSON (National): Thank you Madam Deputy Speaker. I rise to oppose this bill this unnecessary bill the Commerce (Criminalisation of Cartels) Amendment Bill at second reading. Fundamentally if Parliament is going to pass laws we are going to do something that is going to—in the really good cases we enable things but all too often we constrain activities. In this case we can do damage to markets which ultimately harms consumers. So we should be undertaking legislative change when there is an absolutely clear need to do so where there is evidence to support it and where the benefits that we can very reasonably predict will flow through are greater than the costs that could be incurred by doing it. This bill fails on pretty much every count.To begin on the first part in the last term we passed a commerce amendment bill around cartel behaviour which places very significant—quite onerous if the court feels it is necessary—and very serious civil penalties on individuals and bodies corporate that would be found to be conducting their activities in such a way. There is no fundamental—I mean we're talking about things that could be around $10 million or potentially even more in terms of a fine on a company and half a million dollars on an individual. These are sufficiently serious penalties to deter people or at least make them very careful about how they go about their business activities.We do acknowledge and we should acknowledge—we certainly did when we went through that bill—that there are instances where collaboration between companies can in certain perspectives look like it might be transgressing the sort of pro-competitive behaviour that we want and need in our market place but where often it is the case that it is not. So we've already got the law to capture this the law to investigate it and the penalties to take appropriate action and that to an extent will also provide a deterrent from individuals and companies participating or acting in this sort of nefarious manner. So there is no clear rationale as to why we must have a criminal sanction.Next we should look for—OK what's the evidence that there is such egregious behaviour that it might be worthwhile having this? The reality is—and as the former speaker that just resumed her seat a few moments ago Jo Luxton pointed out—that evidence doesn't exist. No one claims that they have instances in New Zealand where such egregious behaviour has taken place that people should be locked up so why on earth are we putting in such a sanction when we've got no grounds for its need in this country?Now it doesn't surprise me from this Government because just this week in the Commerce Amendment Bill—the other commerce amendment bill—we saw them do just that in the greater regulation-making powers to do with regulated airports. The officials on the introduction of that bill in their regulatory impact statement pointed out that there was no evidence that the current regulatory regime for those regulated airports was not working. They also said that even if it wasn't working it would have a minimal impact on consumers anyway which should be another huge test for amending the Commerce Act. But none the less they still said Let's go ahead and give greater regulatory powers." We resisted that. There was a reason why we changed our position and voted in support of that bill in the end and it was to seek to help New Zealanders with the costs they're bearing at the petrol pump but none the less we resisted that because it was a case of creating greater regulatory authority when there was no evidence of a need existing and this particular bill also fails that hurdle.On the benefit side if we've already got the ability to sanction people and companies appropriately or well or harshly and those sanctions themselves form a level of deterrence then what are the benefits that could accrue through criminalisation that we wouldn't otherwise get? Really they should be benefits related to deterrence of the behaviour because we do have some very harsh penalties already if it is investigated and found. There is nothing in the bill that suggests that there is anything extra to be gained for the consumer—after all the Commerce Act is about protecting the interests of the consumer. So there is nothing in the bill that evidences or even talks about the additional benefit that consumers would get—New Zealand citizens would get—if we were able to lock people up instead of just fining them for such behaviour.But let's look at the cost or the potential cost. Officials were really quite clear on this and it was in the regulatory impact statement. Officials like Treasury and others oppose these measures because they believe that the criminalisation element could have a chilling effect on business investment and pro-competitive collaboration between businesses in New Zealand. Let's bear in mind where we do have pro-competitive collaborative behaviour when businesses for their own mutual benefit but also the ultimate end benefit of their customers—potentially joint customers—are working together that is not necessarily a bad thing. In fact in most cases it's an incredibly good thing.If you want to take a simple example—the relationship didn't always work too well and at times it went to court but a simple example is if you take IBM as once the greatest manufacturer of personal computers and Microsoft the near-monopolist—at the time—producer of operating system software for those computers. They ended up competing—because IBM also created software and a lot of it—in the market of software but they worked together in terms of what they were able to bring to companies to individuals to homes across the world in fact by working together on being able to put together a package of hardware and software that made the personal computer a great utility not only for businesses but for people. That's a simple example of where two competitive firms can be working together for the common benefit not only of their firms but particularly of the market and their consumers.So do we really want to have a situation—and some officials believe this is something that could arise from these criminalisation provisions—where businesses who could work together constructively not only for the benefit of them and their shareholders but ultimately for the benefit of consumers are constrained or scared from undertaking those positive actions those positive investments because they're somewhat worried that the big guns are going to come out for them and if they are found to have strayed beyond a mark that the sanctions that could be imposed on them could extend as far as criminalisation?I don't think and I certainly don't believe that the Government has put up any credible argument to suggest that the additional benefits of criminalisation for cartel behaviour over and above a civil penalty regime outweigh those costs or those potential costs. That's another reason why Parliament should be opposing this bill. We don't need it. The costs it could impose—not actually on those businesses. I want to make this point very clear because ultimately that pro-competitive collaborative behaviour works in the best interests of consumers. So why would we put something in place that ultimately has more cost in terms of missed opportunities for consumers than additional benefits it provides?But alas none of that surprises me with this Government. We see it time and time again with legislation that they bring to this House with regulations they seek to make and with their rhetoric up and down the length and breadth of the country. They fundamentally have an issue: they believe that all business is bad and that business people if left unchecked by things like the criminalisation of cartel behaviour will run amok will seek to rip their customers off and will seek to cause them harm in any way they can and that they can only be managed through the iron fist of Government regulation and legislation.Not only is that fundamentally and palpably wrong but in doing so they miss the heart of the Commerce Act which are competitive markets to the benefit of consumers. Competitive markets aren't simply prices or big sticks held up to businesses; competitive markets are borne out of business people and businesses investing: investing in new products investing in new technologies or creating new services and products of utility to customers. Along the way in doing that they create jobs and they create higher-paying jobs. The attitude this Government consistently takes is to the detriment of the consumer. I oppose this bill."