Power Simon: Commerce Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Power Simon: Commerce Amendment Bill — Second Reading 
[Sitting date: 02 September 2008. Volume:649;Page:18315. Text is incorporated into the Bound Volume.] 
SIMON POWER (National—Rangitikei) 
: 
 It is nice to be talking on an upbeat matter in this House—the Commerce Amendment Bill. I want to pick up the Minister on something she said towards the end of her speech. Indeed the Commerce Committee did work well on this issue. For those who have not followed this particular legislation—although if I am right and if I may refer to you directly Madam Assistant Speaker you were in the Chair at the time this bill was read the first time and you took some interest in input methodologies as I recall. But having said that I note that the Minister is right in the sense that this bill did in the end get the unanimous support of the Commerce Committee. That might sound like the sort of thing that one should just sweep over when talking about a report back or a second reading of a bill but this is extremely complex legislation.  
I acknowledge the Hon Paul Swain and just for a moment will make a comment to that effect. He really held up the end for the Labour Party on that committee and got his head around the detail quicker than most. I have to say that the discussions that occurred on that committee between the Hon Paul Swain the chairperson and to a far lesser extent myself probably saw this legislation move in a reasonably friendly and constructive way. That does not mean that there were not serious and very big consequences for many of the industries that have the potential to be covered by this legislation if the committee had got this wrong. In fact the amount of detailed discussion that went into this was vast.  
The Minister as I recall it wrote to the committee part-way through the proceedings indicating her suggestion that the committee look at a number of issues relating to the stages of appeal on merit review and various other matters. That was helpful actually because the National Party during the first reading drew those matters to the attention of the Minister at that time and said that there would be some issues that we would need to deal with in the committee and it would be helpful if we could get some guidance from the Minister in charge of the bill and that guidance came.  
I will not go over the material that the Minister went over. I will leave that to the detailed discussion in the Committee stage when we really get into the nitty-gritty around valuations the weighted average cost of capital and other input methodologies. I am sure that the Minister will be happy to answer any practical questions in that regard as we work our way through this bill.  
There are a couple of things that the National Party will be watching. The Minister has alluded to one or two of them but I want to make these points. During the course of the open parts of the committee—that is the parts that were open to the public—members on our side of the table were keen to know from the submitters whether they thought the Commerce Commission had the capacity and the expertise to deliver on time the detailed input methodology requirements for the purposes of this bill. The Commerce Commission assured the committee when it came before it that that was the case and we look forward to making sure that that indeed does occur.  
On the appeals issue the Minister made a reference to gaming which is something that members on this side raised at the first reading. There was a lot of discussion about whether the point of appeal or merit review should occur once the input methodologies had been determined prior to the price-setting discussions commencing or at the final practical implementation stage of that pricing formula.  
Hon Lianne Dalziel 
: Or both. 
SIMON POWER 
: That is right. The arguments that were made by submitters were that it should occur at both stages and in the end there was some concern from members of the committee that if that was the case gaming would occur using those appeal procedures to prevent that pricing mechanism from locking in and taking effect to the benefit of consumers in the short to medium term. I am confident and I know that National Party members are confident that this is the right outcome and we endorse what the Minister said about having that two-step merit review process.  
I will not talk about airports because I know that the Hon Paul Swain just loves that stuff and he will give a lengthy and detailed contribution as we try to work out the relationship between airlines and airports. I will leave that to him and to Mr Lindsay Tisch who has our particular interest in this area. 
But could I just say in relation to the exemption for consumer-owned electricity lines businesses—again not as straightforward as it may first look—that on the theoretical side the model goes something like this. If the shareholder of the consumer-owned electricity lines business is the consumer and the ultimate end benefactor of the pricing decisions is the consumer the squeeze of pressure from the ownership and the consumer side of the equation will produce the right pricing equation. That effectively is the position whereby pricing will not enable rorting because the consumers are the owners of the consumer-owned electricity lines businesses. I will watch this one really carefully because I think the model in theory makes sense. But as the Minister I think said in her contribution there is a fall-back position if that does not occur which is to directly approach the commission to ask it to have a view on more or less regulation—well it would actually be more in that case.  
But having said that the National Party starts from the position that to add another layer of regulation the case needs to be watertight and we were of the view that in this instance that case was not made—that in fact self-regulation if one likes would be able to determine the correct overall pricing outcome. But it is worth watching and comparing it to the pricing outcomes that will occur as a result of the more regulated environment from the non - consumer-owned businesses. So that is a point to bear in mind as we step through.  
I thought the Minister started quite interestingly by making reference to the purpose clause. I think she is right when she says the balance has been struck. What I am interested in is this notion of the missing market which is the consumer of tomorrow—not the consumer of today nor the infrastructure decisions that are made today—and what the impact will be on the consumer of the future. That is a third dimension to this pricing and purpose equation which I think is worth monitoring and worth thinking about if indeed we ever have cause to revisit the Commerce Act in that particular sense. That is something that members will be hearing a bit more of over the weeks to come.  
By and large this was exceptionally complex legislation. I just want to conclude by thanking the Minister of Commerce for making her officials available to the National members and for the large number of briefings that we received—or that I received—on this particular legislation. We had some spirited discussions about the nature of some of the issues that we have raised today but I thank the Minister for giving me in particular that opportunity. I think that in the end the select committee has come up with workable legislation.  
It is always interesting when one is sitting on these committees. I think it was my colleague the Hon Paul Swain who is soon to retire—it may have been Dave Hereora; no it cannot have been it must have been the Hon Paul Swain—who said to me that the interesting thing about legislation like this is that all submitters agree with it in principle but there are always a couple of things around the edge that need a bit of tweaking. I think the committee did that particularly well. The committee was chaired by a member who was not from the Government side; these committees can work quite well when they are chaired by people who are not from the Government side—well we will see. I have to say that the help we were able to get from the officials was first class. The officials who stepped us through this legislation were experts in this area. I have to say that it is some of the finest work I have seen in the last 9 years. This bill is really tricky stuff and it cannot be overstated just how difficult it is. Those officials did a fantastic job and I hope they will be in the Chamber during the Committee stage so that when we ask the Minister some questions she can lean back and get the answers as we move our way through. The National Party will be supporting the second reading of this bill and we look forward to posing some interesting and timely questions to the Minister in the Committee stage.