Tanczos Nandor: Commerce Amendment Bill — First Reading 
Tanczos Nandor: Commerce Amendment Bill — First Reading 
[Volume:646;Page:15167] 
NANDOR TANCZOS (Green) 
: 
 My apologies; it may well have been my voice that was upsetting the member. The Green Party is pleased to support the Commerce Amendment Bill. We think it represents significant revisions to New Zealand’s anti-trust legislation which was inherited from a time of laissez-faire economic ascendancy and is entirely inappropriate in the modern world. 
The bill will create incentive-based regulation for sectors where natural monopolies exist. Of course it is absolutely essential that there be such regulation because those monopolies are not subject to normal market disciplines of competition. The bill addresses in particular lines companies gas pipeline companies and airports. It creates a number of new initiatives to broaden the purpose of the legislation: to control prices to incentivise investment to mandate efficiency gains and to enforce better disclosure. Those are all things that we absolutely support. 
Section 54Q “Energy efficiency” which is to be inserted in the Commerce Act by clause 4 of the bill states: “The Commission must provide incentives to improve energy efficiency and demand side management and to reduce energy losses when applying this Part in relation to electricity lines services.” We are very pleased to see that in the bill and we are very happy to support it. It is absolutely essential that the regulatory framework for lines companies incentivises energy efficiency and demand reduction. 
Section 52A “Purpose of Part” which is also to be inserted in the Commerce Act by clause 4 states: “(1) The purpose of this Part is to promote the long-term benefit of consumers in markets referred to in section 52 by promoting outcomes that are consistent with outcomes produced in competitive markets so that suppliers of regulated goods or services—(a) have incentives to innovate and to invest including in replacement upgraded and new assets;”—that is absolutely vital and it was lacking in the previous framework—“and (b) have incentives to improve efficiency and provide services at a quality that reflects consumer demands; and (c) share with consumers the benefits of efficiency gains in the supply of all or any regulated goods or services including through lower prices; and (d) are limited in their ability to extract excessive profits.” That is vital. 
It is interesting to reflect just as a little aside—and I am aware of course that telecommunications are regulated through other legislation—that the mindset behind the current legislation which was regulating Telecom until this Government introduced some new regulations is the same mindset. It just did not address the need to deal with those things that I have just said. Both of the sections I have just mentioned mark a sea change in Government thinking and a return to a more humane economic model. It is a move away from the failed laissez-faire economic policies of both Labour and National during the past two decades and it is very welcome. 
The bill starts well by having a purpose. The original 1986 Act had no purpose statement which is bizarre. Secondly the new purpose is to promote the long-term benefits of consumers. It is much more humane than the soulless criterion of economic efficiency in the original Act—a criterion that still holds sway in Treasury and with many members of this House. The benefits must be long term not short term and they must be for consumers not for some fictional “New Zealand Inc.” or multinational corporation. Personally the Green Party would have preferred to see the documents talk about the citizens of New Zealand but it is a bill about markets and the way in which we regulate natural monopolies so we can live with “consumers”. 
The second provision is that the Commerce Commission must provide incentives for energy efficiency which I have mentioned. Finally after years of the Green Party’s calling for efficiency measures throughout the economy we will have them considered as part of any cost-benefit analysis in this legislation—at least as far as the lines companies are concerned. The only improvement that we think could be made to this clause would be to mandate that the discount rate for energy efficiency as outlined in the New Zealand Energy Strategy be used for this purpose. We will discuss that at the select committee as well and we will be keen to see some movement on it. It would guarantee a transparent and level playing field for all parties and would encourage efficient investment that benefits both society and the environment it relies upon. 
The bill brings New Zealand into line with current best practice for managing natural monopolies. It will benefit business with greater certainty while enhancing the powers available to the Commerce Commission to regulate. Significantly the bill broadens the purpose of the legislation to encompass much more than the former narrow-interest purpose of efficient markets. As I have said its purpose now is to promote the interests of consumers and share with them any benefits of the efficiency gains and that is important. 
The bill also allows the Commerce Commission to define critically important input methodologies—the methods used to calculate the cost of capital value assets and allocate costs. This will help to clarify the true business position of natural monopolies thereby removing another avenue for stalling the implementation of price control. As I say the Green Party is very happy to support this bill and we thank the Minister for introducing it to the House.