Webb DuncanDr DUNCAN WEBB (Labour—Christchurch Central): Thank you Madam Assistant Speaker. The intention of any commerce bill is to improve competition. That's really about ensuring that any goods and services are provided to the public at the lowest-possible price whilst ensuring that industry makes reasonable and fair profit margins and that's exactly what this does. This is about this Government picking up some work which admittedly was done by the former Government but also improving it to make sure that we're constantly vigilant. I think one thing we've got to remember when we're looking at competition law matters is that the market will always move. Regulation must change to keep up with the fact that industries move very rapidly indeed. Whilst one of the focal points here is airport pricing a lot of what's going on in this bill—competition studies and enforceable undertakings—will apply across the board and one of the real challenges that this bill addresses is highly complex industries. They are industries like internet connectivity broadband services where there are a number of providers providing extremely complex technical services which to be fair ordinary folk like us on this side of the House would perhaps struggle to comprehend and we leave it to people more gifted in the department to explain. But nevertheless what we absolutely need is to ensure that we have that expertise on hand so that we can embark upon a study which will tell us whether those industries are pricing fairly so that the consumers at home whether it be at the petrol pump whether it be on the internet or whether it be landing at the airport are paying a fair and reasonable price and that really is what the competition studies aspect of this legislation does. What we have there is an information failure and anyone who knows a little bit about economics would know that information failure is one of those situations where the so-called invisible hand withers away because if people don't know the value and cost of what they're buying and selling then they can't make an informed decision about what a reasonable price is. We know that a seller of a product has no incentive whatsoever to explain exactly what the input costs of that product are and what their profit margin might be—quite the opposite. What they want to let you think—as has been happening in the petrol industry recently—is that they're making miserly profits and that in fact they're doing their very best and all of the costs are being thrust on them from elsewhere. Well that may well not be the case. So what we have here is not just an ability to embark upon a market study but rather an ability to embark upon a market study and—critically—to insist that information be provided and that there is compulsory disclosure of information. That information—it's not evil to want to hold on to it but it is a natural human trait to not want to disclose things when it's not to one's advantage and that's what competition studies and market studies are about. It is very clear in New Zealand today that there are a number of industries where market studies will be very useful and the power to insist on that information will be very well used as well. Equally airport pricing—again at the moment we have a disclosure regime. The problem with airport pricing again is a problem of competition. But it's not an information failure; it's a monopoly problem. Like bridges and like ports and airports it's a natural monopoly—if someone wants to land in Auckland there's only one way to do it. So the problem we have is that a company like Auckland Airport—or any other airport to be fair—can be a price maker not a price taker. Now whilst it's clear under the Commerce Act that a business cannot take advantage of market power the fact of the matter is that we don't know whether that's happening or not unless we have full disclosure. So once again we have a disclosure regime but it's a disclosure regime which has been shown to not be working. What we need with airport pricing is something more—something lying behind that. So we need essentially a shadow of regulation. It's really important to point out that in this legislation there's no actual regulation of airport pricing but if we don't make it clear that if needed regulation will be imposed then airports can run amok. So we need to regulate and in particular regulate those major hub airports where they are the only feasible way to travel to and from that destination. What we have is an excellent innovation—the fact that regulations can be made quickly not through the somewhat more ponderous process of this House but through an executive process whereby if there is misbehaviour there that intervention will occur—and that will simply bring discipline. I hope and predict that regulation will never occur because the mere suggestion that it might—as indeed has happened with landing charges falling recently—will impose market discipline. Of course the third and very important aspect of this bill lies around the enforcement. We've got these rather arcane and archaic cease and desist orders under legislation at the moment. They have been used once I understand. They were used I think in respect of Northport which is the Marsden Point refinery port. They are used actually by consent but are not really a workable nimble kind of piece of regulation. So rather than continue with that—and the costs including having standing commissioners—we're going to replace that with enforceable undertakings. It is a framework in which the commission—usually by negotiation to be fair—will discuss the breach or the difficulties with the party and will frame an appropriate behavioural undertaking and that will become part of the record. Importantly with enforceable undertakings they're not just a bare promise. The enforceable part is important. If indeed there is a breach of that undertaking it acts as if it was a court order. So in doing that it it actually will be able to be taken on the basis that this was a court order it has been breached and punitive sanctions will flow. So enforceable undertakings again give teeth. And let's be fair when we're in this kind of sphere when we're dealing with businesses of this size—airlines airports petrol companies and so on—we absolutely need to have a very strong enforcement framework because they simply will price the risk. So we've got to have a framework where the risk of breach is far outweighed by any benefits that might otherwise be obtained. So looking at this this is an excellent piece of legislation. I'm very surprised at the objections from the other side of the House because in fact this is a piece of legislation which seeks to give market discipline and I would have thought that's what the other side of the House was about. This side of the House supports it very much not only for that but also because it looks to ensure that products goods and services are delivered to the consumer at the lowest reasonable and feasible price and that the economy proceeds on the basis not of profiteering but of fair pricing. I think that's something we need to think about a bit more because we seem to have lost that. We seem to think that profiteering and super-profits are OK. Well they're not. Whilst any entrepreneur is allowed to take a profit for their risk what we need to make sure is that there's free information full information and fair information and also that where the market power does exist there are disciplines around that. That is exactly what this piece of legislation does. So back to the purpose of this bill. It's about protecting consumers. It's about ensuring that market failures are addressed and ensuring that prices are appropriate where and when they're paid and about giving the Commerce Commission the powers that are necessary to achieve that not only in respect of airports and not only in respect of petrol pumps but across the board whether that be by market studies by enforceable undertakings or elsewhere by regulation. I'm hopeful that regulation won't be necessary in respect of airports. I don't think after will it will because I think we've got the tools here. Minister Faafoi has done an excellent job in improving this bill and bringing it to the House. I commend it to the House.