Copeland Gordon: State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill — In Committee 
Copeland Gordon: State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill — In Committee 
[Volume:640;Page:10060] 
GORDON COPELAND (Independent) 
: 
 I may want to take a couple of calls on this State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill because I want to talk about the chain of events that has led to Supplementary Order Paper 120 in the name of the Minister and also about the amendment that I have put forward in respect of Subparts 3 and 4 of the bill. 
I was on the Commerce Committee that heard the submissions from the Meat Industry Association. Its representatives pointed out that the effect of this bill which is undeniable is to create a monopoly in respect of red meat inspection services. The member Maryan Street said that that was the status quo anyway but she failed to mention that there is a big change here because although in practice there is a monopoly now there was also at least the possibility that AgriQuality Ltd would come in to provide red meat inspection services in competition with Asure Ltd. That is the very thing that this bill removes thus creating an actual monopoly in every sense of the word. 
After the submissions came in to the select committee I entered into discussions with the Minister Trevor Mallard about the fact that that was an unacceptable result and that it would lead to the possibility of price gouging etc. in the provision of red meat services because there is now an actual monopoly. As Chris Finlayson has pointed out that is very much inconsistent with not only the purpose of the State-Owned Enterprises Act but also the purpose of the Commerce Act which we in Parliament enacted in order to ensure that competition exists and to ensure that where a monopoly exists it is subject to oversight by the Commerce Commission. This bill pretty much negates all of those safeguards as it was originally drafted. 
The Minister to my pleasure said that he was open to amending the bill to ensure that at least the potential for competition would be allowed to continue. By the way he also said that he was happy for the Commerce Commission to review the way in which prices had operated; hence we went away to draft a Supplementary Order Paper. I might add at this stage that he said to me that his view was that two-thirds of the total of New Zealand’s trading partners should agree to accept red meat inspection from non-Crown agencies before the Government would be prepared to trigger competition but that was just the starting point and matters have moved on significantly from there. 
I then worked with the Meat Industry Association and we made an important change to the wording so that instead of the two-thirds idea we would make specific reference to New Zealand’s trading partner singular or trading partners plural. As I mentioned in my second reading speech that is because there are three major blocs of trading partners in respect of red meat exports—that is the European Union the USA and China. We drafted some clauses that would say that if any one of those major markets was to agree to that change in red meat inspection services the New Zealand Government would then allow competition to proceed. 
The detail of that wording was communicated by my office to the Minister’s office by way of an email on 1 May and a reply came back that same day. I will read that reply to the Committee: “Trevor”—meaning the Minister Trevor Mallard—“agrees to the proposed United Future New Zealand amendments but would prefer that they are adopted at the Committee of the whole.” That situation was considered subsequently by the Commerce Committee of which I am the deputy chair where the Labour members present signalled their support for the amendment that I had brought to the committee. That amendment was contained in the minority report of United Future and at that stage National also indicated its support for the amendment. So the Government had on all occasions agreed both in writing to my office and through its members on the Commerce Committee that it would agree to draft an amendment along those lines and that was done. 
A press release was issued and was widely reported in the media. The Meat Industry Association and the meat growers were delighted. It was also agreed that when the Supplementary Order Paper came back it would be in my name. However the Minister returned suddenly from overseas and immediately communicated to me that he would go back on his office’s written agreement to the wording that had been suggested by the Meat Industry Association. In fact he said that he was going back to where he started and that two-thirds of the total market would have to agree to the provision of red meat inspection services by non-Crown agencies before the Government would open up to competition. 
That is why there is now no Supplementary Order Paper in my name. I immediately signalled to the Minister that I was withdrawing my support and that I regarded that process as dishonourable and indeed a betrayal of the agreement that he had previously communicated in writing to me. I think that that is bad enough but much more important is that it is also a betrayal of the thousands of red meat producers in this country. I know that those producers will not forget that the Government having given its word subsequently went back on it. Thank you. 
I seek leave to table the written response of the Minister’s office dated 1 May 2006 whereby he agreed to the amendments I had proposed. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave has been sought for that course to be adopted. Is there any objection? Yes there is.