Hudson BrettPart 3 Enforceable undertakings and miscellaneous provisionsBRETT HUDSON (National): Thank you Madam Chair. I'm pleased that I was a little quicker this time than in the last part—and this being the least controversial part of the bill because we supported Part 3 at the introduction of the bill and we still support it.Often the select committee will undertake deep scrutiny of elements that members find controversial but one can also learn things about elements which the entire committee supports. That actually as it transpired was the case with these enforceable undertakings and why we're even having those. To my point on Part 2 when I said there was no evidence found as to why we should change the current regime with regard to enforceable undertakings there was and officials were able to show us that the current cease and desist model is so ineffective that in fact it has never been used. That alone is some pretty good grounds for wanting to perhaps find a better model.The parties certainly across the Transport and Infrastructure Committee had no fundamental argument about enforceable undertakings being the better vehicle. What we did discover though—and this is a question I will get to for the Minister—is about exactly when enforceable undertakings should be allowed to apply and what sorts of enforceable undertakings should be allowed to apply. So there's no problem at all with the idea that enforceable undertakings will replace the cease and desist model. That is an absolute given. We supported it on the introduction; we still all support it now. It was when we were exploring how enforceable undertakings might be used in the case of mergers that there was actually not even contention—or perhaps contention but not disagreement—across the table. There was agreement with members as to why there was a certain area where we wouldn't allow certain enforceable undertakings in mergers particularly behavioural undertakings.So this bill will enable structural undertakings to be accepted by the Commerce Commission in the case of these merger activities but not behavioural undertakings. The part that was somewhat confusing if you will particularly because of the arguments that the Minister has reiterated in Part 1 that we should trust the Commerce Commission—don't fear the reaper; we can trust them to do the right things—raises the question of consistency. The Minister himself has said that in his mind parts 1 and 2 are consistent in the way they treat the Commerce Commission and the ability it has to use the tools in its tool box correctly and make the right decisions. Why then here in Part 3 were officials adamant that we shouldn't permit the Commerce Commission to have an additional tool in its tool box to allow it at its own discretion to choose to accept behavioural undertakings enforceable undertakings under a merger? They said Oh there's not been enough policy consultation on that matter."Now quite frankly listening to them in that deep discussion around the departmental report on both sides of the table we thought "Hey this is a really good idea. This is actually a worthwhile tool to add to the tool box." It doesn't say the commission has to do it; it simply says here is an option the commission could choose at its own discretion to accept if it felt it was worthwhile. And the answer was "Oh there's not been enough consultation." Well we interpreted that to mean "We haven't asked the Minister if he actually agrees with this yet or not." But here's an opportunity Minister. We can ask you now because we—and it was Mr Wood in the committee who spoke about this alongside myself—think it's a really good idea.Having listened to you today Mr Faafoi I don't necessarily agree with you around market studies but you have said that we shouldn't fear the Commerce Commission; we should have faith in them to be able to make the right decisions and to use the authority they have appropriately to use the right tools in their kitbag in the right circumstances and in the right way. Therefore we should be consistent. We should say "We trust them." So let's trust them Minister. Let's get your officials to whip up a quick Supplementary Order Paper (SOP) and say that it's at the Commerce Commission's discretion that we'll allow them to accept behavioural undertakings as well. You've told us; you've convinced me Minister. Well done—a really persuadable approach you've taken in the committee today. You've done it through conflict but none the less you've done it.I agree with you. Let's put a bit of confidence in them. Let's give greater confidence to the Commerce Commission and say "Look we know you'll do the right thing." So let's give them a quick SOP Minister. Let's give them the ability to choose themselves at their discretion whether or not the merger to accept behavioural undertakings—you've got faith in them. I think we're prepared to back you up in this. A quick SOP—it should only take a minute or two."