Lee MelissaMELISSA LEE (National): I do so sir. Thank you Mr Assistant Speaker. I think when I got up to speak on this bill the last time the bell literally rang as I stood up to say a few words so I have no idea what I actually said in those 10 or 20 seconds.Hon Member: It was very good.Hon Member: It would have been fantastic.MELISSA LEE: Thank you so much. My colleagues behind me are very very kind obviously.Thank you for the opportunity to take a call on the Commerce (Criminalisation of Cartels) Amendment Bill in its second reading today. I'd like to begin by thanking the 20 submitters who wrote to the Economic Development Science and Innovation Committee and the 11 who actually came and gave oral submissions to the committee.Right from the get-go I need to say that I oppose this bill. I guess simply put I don't want people at home listing to the debate to think that I'm not against the idea of people or businesses engaging in cartel behaviour. Obviously it's actually bad. The point at which I actually oppose the bill is that the National caucus has determined that the criminalisation of cartel conduct is actually a step too far to be put into legislative practice. We feel that that move from civil actions to criminal sanctions undermines the economy and does not actually support the ability of businesses and entrepreneurs to innovate and develop their companies. We feel that the civil actions already in fact impose big deterrents for businesses to act in a cartel manner.One of the submissions that actually makes a clear statement—well there were actually quite a lot but I remember the submission by barrister John Land of the Stewart Germann Law Office. In his submission he was concerned with the extension from civil action to criminalisation in terms of the definition and the effect that legislation regulation of cartel behaviour may have on franchise networks where market allocation is a vital part of the development of each practice and that it could in fact come into the determination of a cartel as this law is being proposed and that it is simply not appropriate and not what the law should be envisaging in New Zealand.And there are so many franchise businesses. Some of the examples that the select committee went through and discussed were in fact quite interesting. For example one of the things that even our departmental report sort of suggests is that when a doctor in a low-decile community gets together to agree a maximum child consultation price for the benefit of the community—I mean that is actually price fixing. Would this be considered cartel behaviour? Pubs in a university town agreeing to impose an early closing time to curb drunken behaviour—that's an output restriction. Competing supermarkets agreeing not to offer free plastic to customers to reduce waste—that comes under price fixing and output restriction as well. Doctors agreeing to cap fees for the elderly—that's price fixing. Car dealers agreeing not to sell cars with perceived safety issues such as potentially faulty air bags—that's an output restriction. Some of these things are definitely cartel behaviour and sometimes businesses do not intentionally offend. They do not intentionally do things thinking that they're wanting to act like a cartel or actually harm consumers. It must also be noted that the New Zealand Treasury is not in favour of cartel criminalisation and they believe the existing regime to be working well. I quote Treasury's regulatory impact analysis team's conclusion: Because of the hidden nature of cartels and the difficulty of actually determining the costs they impose on the economy a more precise cost benefit analysis is not feasible. This makes it difficult to precisely determine the incremental impact of criminalisation in deterring cartel conduct". So whether it is a proportionate response to the problem posed by cartel conduct—I mean that's what they said. Is criminalisation needed? Even Treasury doesn't seem to agree.A business that falls foul of this legislation stands to lose hundreds of thousands of dollars possibly millions for an action deemed prohibited cartel behaviour like some of the examples that I quoted earlier. I believe such an approach is probably better. As I've said they stand to lose a lot of money and you know that is enough of a curb instead of criminalising it. It seems a little step too far. Many submitters believe that criminalisation will have a chilling effect. One of the things that I would like to also possibly read out is for example from the New Zealand Initiative which said that they're concerned "the mere intention to engage in cartel conduct is insufficient to target criminal liability and something more is required to reflect the moral wrongfulness or knowledge of wrongdoing." Some of these things are very difficult to in fact prove. I think it is quite worrying when people and submitters and businesses are actually saying that this bill would potentially create a chilling effect on the way that people actually run their business or in fact compete. As I said earlier often these cartel behaviours are hidden. Nobody actually outwardly shows off that they're behaving in a cartel manner when they do these things and I think going that step further might actually bring them further into the darkness. I just think it is very difficult legislation. Also I believe that this is something that we as a National Government dealt with and I don't understand why this Minister has actually brought this back like I guess a re-hash job of the legislation that National actually passed. We actually dropped the criminalisation in that previous bill which was actually passed by this House and this is literally just adding the criminalisation. Once again I stand to oppose this bill and I hope that other members will agree with me that it is very difficult if we criminalise this behaviour. It doesn't mean that it's wrong but I think we have enough of a sanction for them."