McClay ToddHon TODD McCLAY (National—Rotorua): Madam Speaker thank you very much. This is quite a detailed bill in parts so it is important that real scrutiny is applied to it because of course competition law is extremely important. Much of what we do in New Zealand for businesses to grow and thrive is dependent upon that. There have been gains as far as competition and how that helps consumers and a market function adequately and properly over time—that has been good for New Zealand. But in itself rule change in this area doesn't necessarily mean that there will be benefits in as far as the market or companies are concerned—large or small—or consumers. National supports sensible transparent and straightforward regulation and indeed we kicked off some of this work some period of time ago. However when it comes to the misuse of market power we need to make sure that we get it absolutely right.The Minister said that we have good competition rules and laws and that the benefit accrues to consumers. That often can be the case but what also happens to consumers when there is extra bureaucracy or red tape or burden placed upon a market as a result of a desire to make it better where it may not make it better or there isn't a significant gain is those consumers don't necessarily benefit or accrue a benefit; there is cost placed upon them. So in everything that this House does when it comes to the business community we need to weigh up the outcome and benefit of what we're trying to achieve against the actual cost there would be to business. When you place a cost upon a business it must find a way to meet that cost—and they either do it from their bottom line or often through putting prices up. It is not often that it would be the case that they get to make a change without there being an additional cost and where that cost is passed on in any environment or any situation then ultimately consumers are not better off; they're worse off.Actually the Commerce Commission has a number of tools already that I'm not sure they use to their full extent or as adequately as they do. So when the Minister talked a little bit around you know how hard it is in the briefing notes in his speech for the Commerce Commission to get the outcome they want in the court sometimes taking away an intention test and changing that to make it easier for the Commerce Commission to get prosecutions in itself is not always the right thing actually to do. So what we need to do is decide whether there is a real problem here or if it's just something that the ministry and the Commerce Commission and the Minister have seen overseas that they think would be a better idea. Is there a problem we're trying to fix here and is it demonstrable? Actually where are the real examples of where the Commerce Commission hasn't been able to meet an intention test but the practice has been anti-competitive or where they didn't use other tools—they didn't have them—to make a change in the case of the market power provisions that they have or where the company concerned didn't make a change?Take an example of Air New Zealand. There is a lot of talk and a lot of complaint about that at the moment. Well actually what would happen ultimately in this case and as far as Air New Zealand is concerned if they have no intent but they are a large player and want what inevitably is a very very small market—and we need to be careful that in looking for ways to have greater competition we don't find that consumers end up being worse off also sometimes through choice.So there is a lot of detail here. I notice that when we were in Government when we announced to start looking to do some work here The New Zealand Initiative had some very very strong views on this. I don't know whether they've had an opportunity to speak further since the consultations took place and the draft legislation was published. Now that it's been brought forward to the House it will be very interesting to see their views.As far as the safe harbour of intellectual property is concerned this too is quite important. We do need to find a way to get the balance right. I think the documentation has said that you know some of the provisions that were not put in place around competition at the time is because it was felt to be quite new. But if there is a chance that that innovation will be stifled as a result of this it deserves a full and frank hearing. The Minister has said that he thinks that they are overstated but I think we've got to be a little bit careful not just to look at what happens overseas where markets are much larger than ours—and others have a greater comparative advantage to us particularly new entrants to the markets—but also it is not just what our officials tell us. I am not sure that it is overstated the concerns from the sector. This is a sector that has the opportunity to provide a huge amount to New Zealand.If we take the America's Cup at the moment and a company that has a lot of innovation around intellectual property which is Southern Spars—would not exist without the America's Cup having been here. One of the larger players in the world is certainly much more dominant than any other player in New Zealand—well I'd like to hear from them to see whether they think that number one this is a challenge or a problem; number two whether they think there is or there isn't adequate protection; and finally whether this weakens their ability to attract investment to grow their part of the market in New Zealand. When it comes to a lot of things around intellectual property we don't start with a level playing field compared to Australia—I mean there aren't many other countries. We can be innovators if we want. We can do all sorts of things and talk about how wonderful New Zealand is but ultimately it is the business environment that attracts investment and if it makes it harder it must be considered.Finally I want to talk a little bit about what the Government can do itself rather than looking only at competition rules and law. The reason for that is actually when it comes to competitive or anti-competitive practices and market powers and if we are talking directly to cost and to price upon a consumer or a competitor then the Government has a very large role to play in this. It's not in this part of legislation—this Minister is not responsible—but actually in a cross-Government approach to how we make it easier for businesses and better for consumers so that they have more choice and at the same time actually costs are not put up. So if they can afford more comes to all the things that a Government does. The Government has a raft of other legislation it is bringing in through the House in other areas that are going to have an impact upon businesses large and small those who have a competitive advantage those that may have a degree of market power that in the end will be passed on to consumers nothing to do with this at all. So I would say to the Minister that actually we will be supporting this in first reading so that we can hear from those that are likely to be most affected large companies and small and then we'll make a decision as to whether we can support it further because if the intention is just to be like other countries around the world because they're doing it well actually that is not a necessity for New Zealand business. If it is that there is an actual problem there that needs to be fixed and that can be demonstrated and this will go some way to fix it then actually the House would consider it. But if it is merely that the Commerce Commission find it hard to find prosecutions when it comes to market power of a dominant player in the market because we are small then we shouldn't just be changing the rules to make it easier for them; they should do their job better because they have so very many tools at their disposal. The outcome will be one that isn't good for consumers—even though the Minister has said that when it comes to competition the benefits accrue to consumers. Actually more regulation and greater rules and more court cases and more investigations when there is not necessarily a need for that will just put cost upon those businesses. Guess what! Businesses pass those on to consumers. This bill should only go forward if it is good for consumers and the Minister in his introduction has not made that case yet. Thank you.