Smith StuartSTUART SMITH (National—Kaikōura): Thank you Mr Speaker. It is a pleasure to speak on this bill. The National Party will not be supporting this bill. This is a Rob Muldoon attempt to try and fix prices. Price control we know doesn't work. In fact when price controls have been used before the moment they are lifted prices drop. It's well-known economics that this has happened all around the world.There are five importers: BP; Mobil; Z; Timaru Oil Services Ltd. which is a small company quite new to the market; and of course Gull. But BP Mobil and Z are the majors.We have to start with what the problem is here because the Minister said in her speech that the use of terminal gate prices to coordinate—they were concerned about that but she went on to say that actually since the new 2020 Act came into force prices had dropped. In fact it says that in the supplementary analysis report on page 12 The full impact of the Fuel Industry Act 2020 will not be felt for some time". It goes on to say further down in paragraph 60 "However the fixed wholesale contractual term interventions have not applied in full to existing contacts [since] 11 August 2022." So there is no time to find out whether the actual interventions in the Act in 2020 have had effect yet or not and yet they want to come in and give this power to the Commerce Commission to control prices when in fact in this actual report it says quite clearly that the Commerce Act sections 30 and 36 could well have the powers to cover this anyway. Section 30—I know you're wondering what that is Mr Speaker—is the cartel provisions in the Commerce Act: a "Prohibition on entering into or giving effect to cartel provisions." So this could cover this very issue off very well. However the other section I referred to section 36 of the Commerce Act which is "Taking advantage of market power"—so that is exactly what we're talking about here yet they want to bring in another law. That doesn't make any sense at all because the terminal gate pricing which means they have to publish the price at which they are dispatching fuel from the terminal gate and other would-be retailers can buy the fuel at that price—they have to supply it at that price—that is exactly what we were talking about in the grocery bill just completed and yet they're not talking about controlling prices there. As I said there are five operators in New Zealand. In the supermarket space it's a duopoly. So how can we have one rule for a duopoly which doesn't go anywhere near as far as this when we've got five operators? It's outrageous. It doesn't make sense. It's quite a sort of schizophrenic approach if that's politically correct to say these days. I'm getting frowns—perhaps it's not—but it's certainly very odd that the logic that is used in one is not being used in the other. I can see Rachel Brooking over there is nodding her head. She's a very experienced legal professional. I know she can see the gaps in this and agrees with me.We can see from—actually in the UK—the dangers of price caps. Mr Speaker I'm sure that you're aware of what's going on over there at the moment. They've got themselves in all sorts of a mess now with electricity price and gas price caps. They can't get out of it now. They've effectively ended up nationalising all their gas companies because they've got them into such a strife where they've regulated the price that they can sell it at which is actually below cost. Those companies are losing money and have had to be nationalised as a result of that—or almost effectively that's what's happened.So the commissioner in the groceries—they're going to bring a commissioner in they're going to allow access—effectively like the terminal gate price which is already available for petrol—but they in this case want to control the price as well. This is the road to hell economically speaking.But it's worse. In this report the supplementary analysis report it recommends a number of various options are for a trigger to bring in this backstop provision. So there are three options here. Option 2A is "A recommendation to the Minister based on whether [terminal gate prices] exceed a benchmark wholesale price at the terminal". That would be one option. Option 2B is "A recommendation to the Minister based on whether [terminal gate prices] exceed a benchmark built up using publicly available cost data (such as Mean of Platts Singapore)" (MoPS)—and that's a huge refinery and all their sale data is actually publicly available. Or the preferred option is "A recommendation to the Minister after considering whether [terminal gate prices] are persistently higher than would be expected in a workably competitive market." Which one of those options does the House think is contained in this bill? Anyone care to guess? There isn't one. They didn't put anything in there. So there's nothing in the bill that says or guides the Commerce Commission to say "Actually we've got a problem." That's what you would expect. Mr Speaker I know you're an experienced Minister—a member at least—you'd know very well that that's what you'd expect. I know as a former member of the Finance and Expenditure Committee you cover that sort of stuff all the time. We would expect that. It's just outrageous.And then regarding the pricing principle. There were three options for that. Option A was benchmark pricing principle prescribed or the MoPS—which is the Singapore pricing model I just mentioned before—a regulated margin principle prescribed or no pricing principle prescribed. But there's nothing referred to in the legislation at all.This is a shoddy shonky piece of legislation. We deserve better—actually New Zealand deserves better than this. If we're going to bring in really perverse things like price control and controlling prices there has to be a good rationale. They haven't proved the case; if they do prove the case then you'd want the mechanism all clearly laid out in the legislation. They haven't done that. It's very very poor. We will fight this all the way in the select committee and expose yet more of this shonky process and no doubt we will try to improve it as much as possible but I think that's a very difficult task that should really go to the rubbish bin. So I condemn this to the House."