Cosgrove ClaytonHon CLAYTON COSGROVE (Labour): I want to refer to Minister Dean—because I appreciate she has made some interesting comments about a series of issues except I do not think she has dealt with the criminalisation issue unless I have missed something.I would like to refer her to the regulatory impact statement (RIS) at page 23. It makes an interesting point in terms of the arguments in favour of criminalising this activity bearing in mind of course that the only argument the Government has put up against this—I keep reading in some of the documentation Minister Goldsmith and others talking about the chilling effect. They used the words the chilling effect"—to stifle innovation and entrepreneurial conduct. But it makes an interesting point in the RIS when it says that "Another view is that cartel conduct is similar to other white collar crimes and the penalties and sanctions for it should be brought into line with other offences such as fraud and insider trading."I know that the Leader of the House is present and he is a former Crown prosecutor I am told. I assume he has prosecuted many a fraud and white-collar crime in his day. I am not sure whether—Hon Simon Bridges: Not as many successfully but I've prosecuted a few.Hon CLAYTON COSGROVE: I was just going to say—I am not sure how many times he prevailed but he gave it his best shot anyway. But it is a relevant point. Fraud and insider trading are indeed white-collar crimes. I would be grateful if the Minister could tell me what the difference is and why there should be a difference between the criminalisation of those two offences and the non-criminalisation in respect of cartel behaviour.The Chair will know that I am a simple country boy and I just come back to a simple fact and he is nodding in effect that if it is good enough for Australia Canada the US and the UK which have similar jurisprudence Westminster Parliaments similar laws and legal principles as ourselves especially in relation to Australia where we are coming together closer and closer in respect of our commercial and legal arrangements—why is it that those jurisdictions have managed to criminalise this behaviour with no loss as far as I am aware no "chilling effect" to use the former Minister's words in respect of innovation and entrepreneurship?If that is the only case the Government can make then it is totally negated by the evidence coming out of the jurisdictions that have criminalised this behaviour. The argument would be as we hear in the Chamber from time to time to look across the Ditch look across at our other kindred jurisdictions look at the impact of what they have done or not done.I say to the Minister that there is an argument. I know that the ACT member—I have read the media releases. The ACT member has waxed eloquent. I do not quite know—I am trying to search for the words—what great studies or influences have infected his cranium so that he signs up to—Hon Simon Bridges: I have.Hon CLAYTON COSGROVE: You have?Hon Simon Bridges: No no. The Road to Serfdom—he's memorised that and Rand.Hon CLAYTON COSGROVE: —OK—in terms of his notion that innovation and entrepreneurship will be stifled if we criminalise.I could make a number of disparaging comments—that is unlike me I know—about motivation and other things but I will not. But one has to question how in logic you could negate the principle of criminalising this sort of activity when other countries with greater jurisprudence than ours and I would say in many respects especially the UK tighter commercial law than us have done it.Hon Simon Bridges: Yeah well you guys did away with the Privy Council.Hon CLAYTON COSGROVE: No no. I think—Hon Simon Bridges: I always thought that was wrong.Hon CLAYTON COSGROVE: OK well—The CHAIRPERSON (Hon Trevor Mallard): I will just make sure that we get that properly on the record. Thank you.Hon CLAYTON COSGROVE: We would like to thank the Leader of the House's great friends Jim Beam and Johnnie Walker.This is a serious point. Many of us in this House on both sides know many company directors and many eminent business people who are honest who do not engage in this who are very careful around this and who are not afraid of a criminalisation provision. They are not afraid of it. In fact I know many entrepreneurs who would welcome this provision because it would provide a serious deterrent to those companies and those directors few though they may be who do engage in this sort of anti-competitive behaviour. So I simply ask the Minister this: would she give us an explanation? Would the officials be able to elucidate as to what the rationale is because I do not believe that the "chilling effect" argument washes and it has not washed in other jurisdictions?I just want to move on briefly to talk about the other amendment in my name set out on Supplementary Order Paper 408 in respect of new section 36 inserted by new clause 7A. If I am correct in my memory—because it has been 4 years and I do not know about other colleagues but my memory sort of waxes and wanes after year 1 or 2 since the Government proposed this legislation—the Commerce Commission supports the widening of these powers. The Minister says she is not convinced. I respect that view but I go back again to a simple analogy not a commercial one.You drive a car; you crash into somebody right? There is no intent to maim somebody but then you have to look at the impact of the consequence and the cost and the detriment to that individual. You put that in commercial terms because if you do not it limits to a great extent what the Commerce Commission can do. So a company engages in activity that is repugnant it did not really intend to—OK—but it did actually have a consequential effect on other parties consumers other companies competitors but we do not take account of that. Again I just struggle with the logic—why you would not advance the argument from simple intent to impact. A material impact is rendered when an organisation a company engages in this sort of activity. There is an impact and why would you not widen the Commerce Commission's powers to take account of that? If there is another argument—the Minister says she is not convinced—well OK I would like a bit more detail around that.The argument was put forward that officials are not convinced. Well with respect a number of us have been Ministers in this place and a number of us from time to time have said to our officials that they are wrong. Again other jurisdictions like for the criminal offence issue—kindred and developed jurisdictions UK and others—I am advised have these sorts of provisions. If it is good enough for them—and you would argue actually that in the UK and US and Canada and Australia there is far greater competition in a whole series of industries take groceries and supermarkets than there is in New Zealand yet those jurisdictions have these sorts of provisions. We are a small country. We are a small market. We have far fewer commercial entities if you again look at supermarkets—one or two two or three—yet we do not propose and we do not promote these sorts of initiatives and provisions and I just do not get it.I know there are commercial people far more learned than me who again would welcome these sorts of provisions because they provide a level playing field they provide transparency people get a fair go there is recompense and the Commerce Commission can intervene. But the Government seems to—and if the Commerce Commission is wrong I would like to know why because it is pretty pre-eminent. It is affiliated with the Australian Competition and Consumer Commission in Australia. If it is wrong and it has been calling for this for some time—if officials are right and the Commerce Commission is wrong I would really like to tease out or have the Minister tease out the rationale in that regard.These are not political provisions. These are not put up to score political points. These are genuinely held beliefs by other political parties. We are supporting the legislation overall because we think it is important and very good. Other political parties based on the lack of input or the position that the Government will not change its mind on these issues have decided to oppose it. I do not generally buy into that. I think generally this legislation has to go forward. But I think the Committee is owed a duty of care by the Minister via her officials to give us seriously in a non-political way a rationale as to why these provisions are so wrong that the Government will not look at it.I just simply say in summation again that if it good enough for larger more competitive countries and market economies to have these provisions on criminality—section 36 type - provisions—why on earth would a New Zealand Government turn those provisions down when we have far less competition far fewer players higher barriers to entry into certain markets and greater opportunity to engage in this sort of nefarious behaviour? Again as I say we are supporting the legislation but I think these are really important non-political issues that the Minister is duty bound to address—not just to say "We're not supporting it. We don't agree with it." but to tell us in detail why."