Seymour DavidDAVID SEYMOUR (Leader—ACT): Well thank you Mr Speaker. I rise on behalf of ACT in support of the first reading of this Commerce Amendment Bill and I say first reading" because the ACT Party's view is that these issues by their nature are very technical and they deserve to go to a select committee for examination. People who participate in the market and who are potentially regulated under this legislation—they're certainly regulated under the current legislation—deserve to be able to come to select committee and have their say on it. So that's the reason for supporting this legislation to first reading. However we'd also say that on the face of it it doesn't sound like a particularly good idea. Let me start by putting this into the context of recent politics and the legislation of I guess competition regulation and the Commerce Commission in this House. We have had for years the Commerce Commission going along to whoever is the Minister of Commerce and saying "Set us free. Let us do market studies and poke around in any market we want." with incredible powers to request information—more than the police would have—and try to set the world to rights try to tell people how a particular market should be structured. For years and years my good friend and constituent the Hon Paul Goldsmith as commerce Minister would tell them exactly where to go with that proposition. But of course the Civil Service are relentless and they are often here for 40 years. We mere functionaries are elected for only three and eventually they get their way. They find a weaker Minister and they got a bill that allowed them to be able to go off and do their own market studies self-initiated inquiries into markets. So of course the first one we had was into the market for fuel and what did it find? Well basically not much. They really discovered that actually it's not obvious what the price of fuel or the market structure should be for a mountainous country 1500 kilometres long and they couldn't really tell us much of use at all. Happily for the Government having seen that study be done a combination of the oil price and the New Zealand dollar had changed so that fuel prices were no longer a political concern. It turned out that that market study had achieved absolutely nothing. But no doubt the Government will now set a market study on another industry that's politically hot. I just give that Cook's tour of recent activism by the Commerce Commission and recent accession to it by this House under certain Ministers that have politicised in quite a futile way the market and the regulation of competition in New Zealand. What we see in this legislation again or well if we listen to the members who have just spoken they were saying that somehow giving the Commerce Commission more power is automatically good and that removing the requirement to actually show that a particular firm is wilfully exploiting its market power—to remove that requirement is somehow automatically good that it will make it simpler. Well actually if you read the early commentary on this particular move—and I want to commend Buddle Findlay for producing a very good commentary so far and I'm sure there'll be more in select committee. What Buddle Findlay have said is actually if you look at the proposal for the new section 36(1) in clause 14: "A person that has a substantial degree of power in a market must not engage in conduct that has the purpose or has or is likely to have the effect of substantially lessening competition in—(a) that market; or (b) any other market in which the person or an interconnected person—(i) supplies or acquires or is likely to supply or acquire goods or services;" what you have is that if you innovate and your market share grows and there's a lot less competition well potentially what you've done is squeezed out competitors by doing a job well and you could be liable under the Commerce Act for an investigation by an activist Commerce Commission. That doesn't sound very helpful. By the way if the objective here is to reduce transaction costs to increase certainty well it's going to take several years for the courts and the sector and the commission itself to work out how these new rules actually work. So we're moving to what is probably a less certain paradigm and we have the uncertainty of the transition. So the idea that this is automatically good and is going to get us a more competitive market doesn't stand up to a great deal of scrutiny prima facie. Buddle Findlay also identify the possibility that if there was to be a purchaser of goods perhaps a State sector purchaser and they don't spread around their purchasing in a sufficient way then they might actually be liable for distorting the market. Now they're not willingly exploiting their power but what they are doing is having the effect or doing something that's likely to have the effect and are liable under this legislation. So what it's going to do is it's going to mean people are going to have to watch their back all the time to make sure they're not too successful or occupying too much of a market because they could become liable. Despite having good intentions just trying to do their job people could become liable under this legislation. Then you move on to the intellectual property (IP) safe harbours. Well the legislative statement the Minister presented said that it's now an outdated view that intellectual property can't be subject to competition law. Well this again is going to lead to an enormous amount of jostling in the transition to this new paradigm and possibly the new paradigm won't actually be any better than what we have now because the Commerce Commission is going to have to determine whether somebody holds too much intellectual property to allow competition. I would argue that the Commerce Commission as often is the case—as was the case with the market study into the fuel market—simply does not have sufficient knowledge to know whether or not it's making the market more or less competitive. By the time it figures it out particularly in the world of IP chances are the answer will have changed anyway. So it seems very unlikely that the Commerce Commission is going to be able to improve matters in intellectual property simply due to a lack of knowledge and the sector that it's trying to regulate likely moving faster than it is. If you want another example of that we had the Commerce Commission's blocking of the StuffMe merger. The knowledge that the commission assumed—it assumed it knew whether or not either of the existing entities would survive or whether the merged entity could survive; nobody knew that. Nobody envisaged the developments that have subsequently taken place. If you'd bought into NZME around the end of the lockdown last year you would have made a lot of money because actually NZME have done very well but I couldn't have predicted that. I wish I had—I might be richer not standing here. But the point is that when you look at interventions the commission's made often it's intervened in markets where things change very rapidly they don't have a lot of power to anticipate what developments will happen in the future and therefore the assumptions behind their findings often turn out to be false before they are delivered or before their reports are delivered and their ability to actually improve competition or improve overall welfare is much more modest than those in the commission who lobby the Ministers to bring legislation to this House to get more power will concede. So those are all the reasons why we're very sceptical about this legislation. But as I said at the beginning of the speech I also feel that when there's highly technical matters such as this then the people who have real practical day-to-day expertise should be the ones that come before the committee and are able to actually give their perspective so that members of this House and particularly those on the select committee are able to understand what is going on and hopefully do their job as a select committee and improve the legislation. So I look forward to that happening. My colleague Damien Smith from ACT who is a lot more experienced than I am in these kinds of commercial matters will be on the committee examining it I understand. And I look forward to his and other MPs' feedback on how that committee examination went when we return to debate the second reading of this Commerce Amendment Bill in this House. In the meantime ACT will be voting for it to go to select committee. Thank you Mr Speaker."