Part 1Co-operation with overseas regulators
CHRIS HIPKINS (Labour—Rimutaka)
: I am happy to take a brief call on this part of the Commerce Commission (International Cooperation, and Fees) Bill while the other Labour speakers, who, hopefully, are watching this in their offices—that is, Cunliffe, Cosgrove, Huo, and various others who may be watching—are, I am sure, on their way to the Chamber. Of course, they were not expecting to be here until 9 o’clock, because the agreement of the Business Committee was that the Budget debate would
continue until 9 o’clock. So I will put on record now that the Opposition members are very unhappy, and after an agreement that was reached unanimously by the Business Committee has been breached, our further co-operation with the Government will be much, much more restricted from this point onwards in proceedings. The Business Committee does operate on a unanimous basis, and when the Leader of the House gives an undertaking to the Business Committee, we expect that it will be adhered to. The agreement was that the Budget debate would continue until 9 o’clock, so we are somewhat disturbed that that agreement has been breached, and that the debate was adjourned before the time that was agreed with the Leader of the House was reached.
I am sure my colleagues who have more knowledge of the particular clauses in this bill that we are going to be debating, who are watching this and listening to this, will be on their way to the Chamber at the moment. I can see that Mr Cunliffe has just arrived, and I am sure he will be happy to pick up the debate after a few minutes. I will give him a few minutes to collect his thoughts, and then I am sure he will pick up the debate.
But I do want to say that I am incredibly disappointed at this breach of good faith by the Government—
Hon Dr Jonathan Coleman: I raise a point of order, Mr Chairperson. These remarks do not seem to relate at all to the topic in hand.
The CHAIRPERSON (Lindsay Tisch): I know that the member will come to Part 1 in a moment, but there is a procedural matter that he is referring to, and I am happy to accept that. I know that the member will come to Part 1.
CHRIS HIPKINS: Thank you very much, Mr Chair. I will come briefly to Part 1 while my colleagues sort themselves out. This bill basically has two parts. The main provisions of Part 1 set out the cooperation provisions with overseas regulators with regard to restrictions on providing information, the arrangements regarding Government to Government cooperation, and what the cooperation agreement must contain. Those are contained in new sections 99C through to 99O, inserted by clause 6. Other new sections include procedural arrangements with regard to reporting on the use of cooperation arrangements, conditions on providing information and the sharing of information, and the maintenance of privilege.
Those are the main provisions that are in this particular part of the bill. I am sure my colleague David Cunliffe, who I am sure is about to speak on this bill—and possibly Raymond Huo, who is also here—will be willing to elaborate on those provisions further.
Hon DAVID CUNLIFFE (Labour—New Lynn)
: Labour supports the Commerce Commission (International Co-operation, and Fees) Bill. It is a bill that was originally introduced by the Hon Lianne Dalziel. It was then adopted by the Hon Simon Power—who, it might be said, was a great loss to the National Cabinet—and it has now been taken over by Craig Foss, my former colleague on the Finance and Expenditure Committee. But since 2010 it has, unfortunately, been languishing on the Order Paper.
The proposals in this bill are part of the work programme supporting the memorandum of understanding with Australia on business law cooperation, and on that I would like to make a couple of introductory comments. The bill aligns us with Australia, which passed similar legislation in 2007. It is not a matter of enormous pride for this House that it has taken us until 2012 to return the favour.
There are a couple of general comments that might be made about the progress of business law and competition policy in the two countries. The first comment is that Australia, because it has a larger, more complex, and perhaps more nuanced political system than our own, did not embrace what we call Rogernomics with quite the same fervour or gusto. If I recall correctly, in about 1987, when I was offered a job at Treasury, I turned it down because I did not want to enter a monastic institution where
the religion of the land was something called neo-liberalism or, as we called it, Rogernomics. I am very glad that I made the right decision in turning that job offer down. I went to work in the Ministry of Foreign Affairs and Trade, before Murray McCully was the Minister. I guess those were the golden days.
Since those days, the way that New Zealand approaches the closer economic relations arrangements—which, of course, were the brainchild of Tim Groser in his own mind, but that is another story—has changed. Back in the 2000s CER was designed to pursue the interests of Australia and to pursue the interests of New Zealand, and to do so where those two interests mutually overlapped. What has changed under this Government is very, very significant. It has changed the purpose clause so that the memorandum of understanding supports the joint—the joint—increase in business well-being across both economies. One might very well suggest that that change is, in the language of economic geography, usually going to be in the nature of the interests of the stronger, larger partner. We all know that if we were perfectly open to a single labour and capital market, more of the smart money, the research and development, and the big-end capital would migrate towards Australia. So it is important that we do at least incorporate into New Zealand law the sometimes greater protections that have been developed in Australia’s larger and more complex system.
For example, in the area of telecommunications, a portfolio that I used to hold, we learnt a great deal from the ACCC—that is, the Australian Competition and Consumer Commission—and its approach in relation to the regulation of telecommunications in Australia. That was one of the things that became instructive in the way we approached the then virtual monopoly, the vertically integrated monopoly, of Telecom New Zealand. It was also one of the reasons why we were able to benchmark the changes of 2006 that led to the unbundling of the local loop, the strengthening of the Commerce Commission, and, interestingly, the resulting doubling of investment in that sector, along with lower broadband prices and higher uptake. That was partly because we were able to benefit from the experience of our Australian cousins.
Much has been made of the international nature of transactions and the territorial limits of regulators being a reason why it is very desirable for regulators to be able to cooperate to manage competition and consumer effects of transactions across various domestic markets. It is important for the Committee to recognise that the Commerce Commission is currently constrained from providing the investigative assistance and compulsorily acquired information that it holds to overseas regulators. If it is the case, as is too often the case, that the head office of a New Zealand company that has been bought up by an Australian, or maybe another, parent moves across the Ditch and the big strategic decisions are made there—and there might be a bit of transfer pricing going on so that it does not pay too much tax in the New Zealand market, hypothetically speaking—it is very, very important that when that company is caught out by the New Zealand regulator, it can share that information with the Australian regulator. [Bell rung] Mr Chairman, I probably will not take the whole of the next five minutes, but I do want to touch on several of the important—
Chris Hipkins: Yes, you will.
Hon DAVID CUNLIFFE: Oh well, my whips are saying that I will. Normally I am one of those who are quite challenged to find the words to fill a whole speech, but I will force myself, because the whips have asked for that. Such is the life of a parliamentarian these days, I guess. As they say, the whips own my body, so I am here to do their bidding. There we go.
So let us just dig down, in all seriousness, for a moment and look at some circumstances where that information-sharing power might be important. For example, the New Zealand Commerce Commission’s statutory powers of compulsion can be used
only in relation to enforcement and adjudication within New Zealand. Well, that is not very useful if it is a trans-Tasman business and if the naughtiness happens to be going on at the head office across the Ditch, and it gets the evidence here. It needs to send the evidence to Sydney so we can catch the bad guys. There is no point in having the sheriff with the posse stop at the gate of the neighbouring ranch. Well, that is what we have got until we pass this law.
There are also legal constraints on the provision to overseas regulators of confidential, compulsorily acquired information that is already held by the commission. This in turn limits the willingness of overseas regulators to provide assistance to the commission, such as cross-jurisdictional assistance, that might be mutual. Another example, in a different sphere, is the way our officials and Australian officials have developed protocols on an immigration policy in order to swap sensitive information on cases that cross the Tasman. There is no such similar power until we pass this bill in the area of commercial and competition regulation.
I will say just a couple of words on the main provisions of the bill. There are two parts. Part 1 amends three Acts. Part 1 includes Subpart 1, which amends the Commerce Act, and which is the substantial part of the bill. It sets out the cooperation provisions with overseas regulators and provides for Government to Government cooperation, and there are also new sections on procedural arrangements with regard to reporting on the use of cooperation arrangements, conditions on providing information, and the sharing and maintenance of privilege, which is also very important in the legal world. Subpart 2 amends the Credit Contracts and Consumer Finance Act, ensuring that the changes to the Commerce Act apply to the Credit Contracts and Consumer Finance Act where references are made to consumer credit law and the Minister of Consumer Affairs. Subpart 3 amends the Fair Trading Act to ensure that changes to the Commerce Act apply to the Fair Trading Act.
Part 2 covers the fees that will be charged, and we have two SOPs. For the benefit of the public out there, these are Supplementary Order Papers. These are the last-minute changes the Government brings to the Committee to keep the Opposition guessing, or because officials did not do their homework in time. We have two of them today. Supplementary Order Paper 274 introduces a new subpart, because the original bill did not amend the Telecommunications Act to bring it into line with the legislation. This Supplementary Order Paper is in breach of Standing Order 299(1). No? No, it is not now. That is good; the super-Minister, the Hon Craig Foss, has sorted it out. That is very good. We are very pleased about that. Perhaps he is the next budding super-Minister.
Hon David Parker: Maybe he’ll get education.
Hon DAVID CUNLIFFE: Maybe he will, because apparently it is going to be vacant soon, I hear. Or he may get one of those uniforms, like Steven Joyce has, with the underpants on the outside and the long flowing cape. I am always confused: if he is Superman, why have they given him a department called “MoBIE”? That’s a different fairytale.
Hon Member: Because he’s a dick.
Hon DAVID CUNLIFFE: “MoBIE Dick”—perhaps that might be what the underpants are about, but, anyway, that is another matter.
Supplementary Order Paper 26 divides this bill into four bills, and there, pretty much, we have it. It is a sensible bill—a sensible bill. I do not think anyone in this Chamber would argue that this is not a sensible bill. It is, one might say, a trifle more sensible than the recent Budget. Thank you.
Hon CRAIG FOSS (Minister of Commerce)
: I intend to move Supplementary Order Paper 274 during the Committee of the whole House. I note that because of
changes to the Standing Orders the amendments set out on the Supplementary Order Paper, which was tabled before the last election, can now be considered without leave of the Committee of the whole House.
That Supplementary Order Paper proposes to add new Subpart 4 to Part 1 of the Commerce Commission (International Co-operation, and Fees) Bill to amend the Telecommunications Act 2001 to authorise the Commerce Commission to provide investigative assistance and compulsorily acquired information, under the Telecommunications Act, to assist overseas telecommunications regulators. Incorporating the Telecommunications Act is consistent with the overall intent of the bill to allow the Commerce Commission to assist equivalent overseas regulators in the enforcement of competition and consumer laws. The Supplementary Order Paper will also align the New Zealand and Australian approaches, as the Australian Competition and Consumer Commission is already able to provide such assistance to the New Zealand Commerce Commission.
I too acknowledge the rapid way in which we have come to this bill, but we are here now. In respect of what a previous speaker said, I do acknowledge the general cooperation and collaborative nature around this particular bill. I hope that that continues to facilitate its progress.
Hon Lianne Dalziel: There is no facilitation—not after breaking deals.
Hon CRAIG FOSS: Fine. I am just saying my piece. On that point I acknowledge, as I did in my second reading speech, that the bill originated with the former Minister of Commerce, the Hon Lianne Dalziel, under the previous Labour Government. Many of these commerce bills are across Parliament, and we fully respect that. I do always make a point of acknowledging that point.
Did I hear right that the Hon David Cunliffe was off to a monastery or something? I note he has a beard, ready to go a monastery or something. But he did raise a very good point about the Supplementary Order Paper and the Telecommunications Act. I respect that we are on Part 1 at the moment, but this is just an introductory speech here. It is just an acknowledgment of how things have changed over recent years, and in hindsight that probably should have been thought of in the initial stages of the bill. But again there is a collaborative nature across the House with regard to its merits, and an acceptance of why that should be included.
As the previous speaker, David Cunliffe, noted, the bill is relatively small. There is a Supplementary Order Paper that breaks it into four bills later on in respect of the Acts that it amends or impacts upon. Importantly, it is a very important part of our single economic market agenda with Australia, and it is one of the 28 key points that the Government has signed up to with Australia. We are making good progress on those. As I noted at the start of my speech, Australia can already share information with New Zealand. This bill will empower the New Zealand Commerce Commission to share such information with its counterpart over there. We already have cross-sittings of the chairs or representatives of both the Australian equivalent and the New Zealand Commerce Commission. That keeps them aware of what is going on in the two economies. As other members have noted, so much of our economy crosses the Tasman in one way, shape, or form.
Most of the detail is in Part 1, which we are addressing now. I am looking forward to hearing views and points from members around the Chamber. I do acknowledge the work of the Commerce Committee, and the improvements and value that it gave to this bill, particularly the sections about what was originally drafted as Government to Government permissions, and for Government regulators to also be able to talk to each other.
I note that although this bill concentrates on New Zealand and Australia, in fact it could be empowered to go beyond that, subject to some upfront agreements for protections of privacy and protection, as members will see, of self-incriminating statements, etc. They would not be shared. There are strong rules upfront about how information could be shared, and members may also note that a lot of the information around Part 4 of the Commerce Act is actually not to be shared. Most of those are domestic energy - type situations in New Zealand. I look forward to hearing members’ views and opinions on this part of the bill.
Hon DAVID PARKER (Labour)
: When I came down to the House today, I looked at the Order Paper and we had 12 hours and 2 minutes remaining of the Budget debate. And here we are just a couple of hours later having switched not to the next bill on the Order Paper but the one after it. The Government seems to be in a state of disarray today—
Hon Craig Foss: No, they’ve done the others.
Hon DAVID PARKER: What’s that?
Hon Craig Foss: They did the Crown Entities Reform Bill.
Hon DAVID PARKER: It did the Crown Entities Reform Bill? The Committee stage went through very fast, did it? Well, I might be mistaken, but I did not think—
Hon Lianne Dalziel: We did that.
Hon DAVID PARKER: We did it very quickly. Well, the first mistake that we had from Gerry Brownlee today was when he came down here to speak in the Budget debate, and despite his being responsible for the Order Paper, which said the amendment was in the name of David Shearer, he said it was in the name of Grant Robertson about three or four times, until Mr Joyce sort of, with some embarrassment, whispered into his ear that he had that one wrong. Then, of course—
Hon Member: Touch of the “Banksies”.
Hon DAVID PARKER: A touch of the “Banksies”. That is right—a touch of the “Banksies”. Then we had some debate around the Budget, and when it was obvious that the debate was about to turn to Vote Education and the terrible debacle that there has been for the Government around intermediate schools, lo and behold, all of a sudden we had an adjournment motion on the Budget debate. Even with many, many hours remaining in that Budget debate, it was not convenient for the Government to continue. It had to come to these other “urgent” pieces of legislation, which have been languishing—
Hon Lianne Dalziel: How long has this one been sitting there?
Hon DAVID PARKER: Well, that is right. This Commerce Commission (International Co-operation, and Fees) Bill was introduced originally by the Hon Lianne Dalziel in the last Labour Government. It then languished at the Commerce Committee for some time, because there was more—
Hon Lianne Dalziel: Under the chair of Lianne Dalziel.
Hon DAVID PARKER: —under the chairpersonship of Lianne Dalziel, because there was some more pressing and important business before the committee for it to attend to first. Then, the bill having been back here since November 2010, the Government let it languish on the Order Paper until today, because—
Hon David Cunliffe: They must be hurting.
Hon DAVID PARKER: I have heard that the Government has been hurting so much that the Prime Minister’s emissaries have been around the press gallery today blaming Hekia Parata. Collective responsibility is not really—
The CHAIRPERSON (Lindsay Tisch): Order! Part 1.
Hon DAVID PARKER: I am being told that we should be addressing Part—
Hon Clayton Cosgrove: I raise a point of order, Mr Chairperson. [Interruption] Are we interjecting on points of order now?
The CHAIRPERSON (Lindsay Tisch): A point of order, the Hon Clayton Cosgrove.
Hon Clayton Cosgrove: With respect, and not challenging your ruling, the Minister in the chair, the Minister of Commerce, in his address did actually say that he was going to—and fair enough too; he was wandering slightly wide of Part 1—address some other issues, which, in fairness to the Minister, I think were valid. But if that leniency is going to be extended to Ministers, it should be extended to those on this side of the Chamber.
The CHAIRPERSON (Lindsay Tisch): I have given the speaker 2½ minutes of talking about things other than Part 1. I have asked him to come back to Part 1, and I know he is going to.
Hon DAVID PARKER: Thank you, Mr Chairman. That is a fair point, and I will come back to the bill. This bill would allow the Commerce Commission to share information if there was an inquiry being conducted in one country or another into, for example, the efficiency of provision of education and there was said to be some anti-competitive practice at large. It could be whether charter schools were cooperating amongst themselves in a way that was anti-competitive, and it would be interesting to know from the Minister whether, if the Crown was engaged in some anti-competitive procedure that was affecting school conduct—for example, if it was to try to tell all of the intermediate schools in the whole of the country that they should close down their technology—
The CHAIRPERSON (Lindsay Tisch): Order!
Hon DAVID PARKER: Mr Chairman, this is within order. I am asking whether, if the Crown was to give a direction to all of the intermediate schools, it would be caught by the inquiry functions of the Commerce Commission that are being extended in this legislation. I am not sure from my reading of this legislation whether it applies only to private enterprise actions, like charter schools, or whether it would apply to Crown actions were a Minister or a Government silly enough to tell schools that they had to change student-teacher ratios in a way that effectively required—I want the Minister to take a call as to whether that sort of conduct on the part of the Crown would be caught by these investigative functions that could now cooperate, and whether it could get lessons from Australia as to whether that country has ever been silly enough to give a direction to its intermediate schools in a way that would close down all of their technology classes. I am interested in the Minister taking a call and answering that question.
I am also interested in another matter. At times we have regulated monopolies in New Zealand, including in respect of electricity lines. There is an unclear point in New Zealand as to whether the input methodologies that are relied upon to set the prices for lines are right in New Zealand.
Hon David Cunliffe: It’s a hot debate.
Hon DAVID PARKER: It is a hot debate. It is going to appeal at the moment, and Vector would say that the Commerce Commission in New Zealand is allowing it a lower cost of capital than is allowed in Australia.
Hon David Cunliffe: What does the Minister think?
Hon DAVID PARKER: I would be interested to know what the Minister thinks of that, and I would also be interested to know what the Minister thinks as to what the consequences of that are for the regulated monopoly. I will tell you why I am interested: because I have been told that the consequences of that for Vector are worth between $400 million and $700 million. We could benefit from cooperation with the Australian authorities as to what they think is the right answer to that.
Hon David Cunliffe: It’s like two Skycity Casino deals.
Hon DAVID PARKER: Well, that is the exact point I was going to make, Mr Cunliffe. It is strange that you should mention that, because if, rather than pinging Vector on its return on capital, the Government was to say to Vector “Why don’t we give you the same rate of return as they have in Australia, and you build us a convention centre?”, we might get a convention centre for cheaper than the Skycity group is willing to do it, without the adverse effects of the pokie machines. So it would be interesting if the Minister could respond as to whether this sharing of information between regulators on both sides of the Tasman, in this case, could actually turn up some information to show whether that decision by the Government in respect of the Skycity Casino is not really as silly as it appears from the outside.
Hon David Cunliffe: Dotcom.
Hon DAVID PARKER: Dotcom. That is right. Well, look, the police seem willing to share his computers, so maybe this is just another example of sharing of information.
There is one other serious question I would like to raise, and that is what controls there are going to be against the inappropriate sharing of information. I would not want to see information being shared—for example, in relation to telecommunications companies—with some countries that do not have proper checks and balances in the protection of the civil liberties of their people in their countries. I think we have to be a bit careful—[Interruption] What is that?
Hon David Cunliffe: Not naming any of them.
Hon DAVID PARKER: Not naming any, other than Fiji, perhaps, which I would name as a close neighbour with whom we should not be sharing information on some of these matters.
I have raised a number of questions. I am particularly interested in the point as to whether there could be a sharing of information on, and whether this bill would apply to, decisions of the Crown as, effectively, a monopoly purchaser of education services, if it made some ridiculous decision that would effectively cut technology classes out of all schools—whether that sort of thing could be the subject of an inquiry by the Commerce Commission, for the purposes of which it could gather information or share information with the Australian regulator. That seems to be the most practical instance that we have had recently of some monopoly or monopsonist practice that has terribly adverse effects and that there needs to be an inquiry about.
ANDREW WILLIAMS (NZ First)
: I take a call on behalf of New Zealand First on the Commerce Commission (International Co-operation, and Fees) Bill. I would concur with the honourable member Chris Hipkins in terms of what was an agreed arrangement at the Business Committee to go this evening until 9 p.m. on the Budget debate. But it was very interesting that, obviously, the Government members were finding the heat a bit too hot. They did not like the information that was being put on the table, and it was very interesting that the “Superman” super-Minister had to leave the House with a great deal of urgency because it was getting a bit too hot for him.
But getting back to the Commerce Commission (International Co-operation, and Fees) Bill, I do apologise; I was going to go back to my office, as many other members were, to get some of my speech notes for later in the evening, but as we were not given the courtesy to do that and this bill was brought forward, then we will have to explore things on the hoof. It is on the hoof—
Hon Clayton Cosgrove: A bit like their policy—on the hoof.
ANDREW WILLIAMS: And it is a little bit like the National Government—you are dead right. It is a bit like the National Government, and how most of its policy is on the hoof. Most of it, as a result, is of that ilk.
I would like to raise a few points out of the bill, particularly new section 99H, in clause 6. It says, in new section 99H(1): “Following a request by a recognised overseas regulator made in accordance with a co-operation arrangement, the Commission”—as in the New Zealand Commerce Commission—“may do either or both of the following: (a) provide compulsorily acquired information to the recognised overseas regulator: (b) provide investigative assistance to the recognised overseas regulator.”
This is of great assistance in terms of dealing with, particularly, our sister nation across the Tasman, Australia, which already has this in place, and has had this in place for a few years. It will help with inquiries in terms of what is happening on both sides of the Tasman, in particular, but also with many of our other international trading partners.
But when I get down to new section 99H(2A), it says: “If the Commission considers, after consultation with the Ministry of Foreign Affairs and Trade, that a request for compulsorily acquired information or investigative assistance may have significant trade consequences for New Zealand, the Commission must refer the matter to the Minister of Trade.” This is a very interesting provision, because it basically means that the Ministry of Foreign Affairs and Trade is brought into the whole picture in terms of any matters that are occurring within New Zealand or, indeed, could be occurring in an overseas market, where a jurisdiction commission in an offshore market where we operate is similarly inquiring into the activities perhaps of a New Zealand company, or a company operating there that has interests in New Zealand as well.
So that is very interesting, and they, perhaps, would be very interested in making sure that New Zealand does play by the rules—that we do operate by the rules and are certainly above board. It might, for instance, be such that they would come to the Ministry of Foreign Affairs and Trade and ask for its opinion on these sorts of things. It is interesting that today, the same day, we read in the
New Zealand Herald that the Ministry of Foreign Affairs and Trade was stripped of $6 million by the Minister of Foreign Affairs, who happened to be the Minister for the Rugby World Cup. He stripped $6 million out of the Ministry of Foreign Affairs and Trade to pay for party central for the National Party on Queens Wharf, to expand it into Captain Cook Wharf.
I think it is interesting that the very body that could be providing assistance to the Commerce Commission to provide international information across to our Australian counterparts might actually be the same body that had $6 million stripped out of it for other commercial activities to basically promote the Rugby World Cup. If you were an organisation in Australia and you were involved with bidding for the Rugby World Cup, were running part of the Rugby World Cup, were a tenderer for the Rugby World Cup, or were trying to be a big player in the Rugby World Cup, you would start to question whether it is fair play that the New Zealand side of things stripped $6 million out of its Ministry of Foreign Affairs and Trade, just pulled it out of a hat, and sent it across to party central to pay for the upgrade of a wharf. So it starts to move into the area of “How does New Zealand operate here?”.
More and more, under this National Government, we are starting to see some very shonky things happening, and I think that before we start being the regulator, with the Government saying “This is how you will play by the rules.”, perhaps this Government needs to reflect on itself and say “Well, we will also abide by the rules and play by the rules.” We cannot be judge and jury, and we cannot provide international information to our sister commerce commissions and our sister governmental organisations around the world if we ourselves are not squeaky clean, and if we ourselves are not providing something that is upfront, very clear, and very transparent.
When I as a New Zealander see things such as the Ministry of Foreign Affairs and Trade having something like $24 million stripped from it—removing our embassies in Sweden, downgrading many of our posts, greatly reducing our presence in Europe, and
greatly reducing the efficiency of the ministry in terms of our top international people around the world—it is concerning to read, on the very same day, in the biggest paper in New Zealand, that $6 million was pulled out of our Ministry of Foreign Affairs and Trade in order to pay for Rugby World Cup party central for the National Party.
So I say to the Minister in the chair, the Minister of Commerce, let us get in behind this Commerce Commission cooperation, let us be a genuine player on the world stage, and let us be fair and equal to all. But let us also make sure that back at home in our own backyard we play by the rules.
Hon CLAYTON COSGROVE (Labour)
: I want to raise a couple of issues, but before I do I just note for the record that the reason we are here tonight not debating the estimates is what I would call the usual reason—I see Mr Sam Lotu-Iiga nodding and grinning in agreement. This is a Gerry Brownlee special. This is a Gerry Brownlee special, in that the deal was reached to debate the estimates to 9 o’clock, and Gerry stuffed it up, either deliberately or otherwise. So here we are, deal broken, debating this piece of legislation, the Commerce Commission (International Co-operation, and Fees) Bill, which somehow tonight, after a robust estimates debate, has taken on such urgency that Mr Brownlee comes down to the House on bended knee, breaks the deal, and here we are.
The question you have got to ask is why. Well, I suspect that—and I will make this very relevant to the bill, Mr Chair, because I am anticipating your thought in respect of my speech—after Hekia Parata came down and had to effectively reverse and back down from the policy over teacher numbers, the feet were put to the fire. Then down came Gerry on the draught horse, on the silver charger, to break the deal—to break the deal—and here we are debating this legislation tonight.
I have got a couple of questions for the Minister in the chair, the Minister of Commerce, on that—for instance, if we look at some of the interesting things in the Budget that are very germane to this bill, like rest home care. I have a question for the Minister. So if one had, for instance, a—
Michael Woodhouse: Very germane to the bill!
Hon CLAYTON COSGROVE: It is. Oh, it is germane to the bill, and I will tell you why before you leap to your feet. Taihoa, help is on the way. It is germane because what if one, for instance, and this is a question for the Minister, had an Australian-owned rest home provider with Kiwi interests, and one of the two companies, say the New Zealand company, was attempting to claw back and increase the numbers of fees from its residents—say, for instance, colleagues, to make up for the fact that the Government has now slashed the asset-testing subsidies—what if they were trying to claw some of that back? Would those two entities, Minister, be subject to this bill in respect of monopolistic behaviour or collusion, and, therefore, subject to the investigative procedures if they shared that information? That would be interesting, given—
Darien Fenton: That’s a good question.
Hon CLAYTON COSGROVE: —that is a good question, I think—that, of course, the third National Government in its generation—Muldoon, Bolger, and now the Key Government—has kneecapped the oldies in respect of, in this case, asset testing; in its history, the pension; or in Muldoon’s history, of course, bribing people with their own money.
The question is this: if a New Zealand - owned rest home operator decided to, in a monopolistic way, claw back moneys, could that information be shared with an Australian provider, and would that then be collusion and subject to the provisions of this Act? I know that this is an issue that Mr Lotu-Iiga, who is an eminent lawyer, I am told—an eminent lawyer; more so than Mr Finlayson—is exploring and is deeply concerned about for his constituents, of course, in South Auckland—
Peseta Sam Lotu-Iiga: It’s not South Auckland.
Maungakiekie’s not South Auckland.
Hon CLAYTON COSGROVE: —or Maungakiekie, I should say, who are subject, and may be subject, of course, to rest home provisions.
The second point I would make is Mr Parker’s. It will be very interesting to note—and it may be that the Minister has not anticipated this question as this bill has gone through—given that the Crown is effectively a monopoly provider of services within the State sector and it is stripping resources from that education sector, particularly pertaining to technology, whether it is the case that the Australian regulator could require an investigation and require information to be shared to bring that provider, namely the Crown, to account if it was engaging in monopolistic behaviour. I think that is a very important question, given, I suspect, that the Minister—though he is a Minister, and therefore part of the whole Budget process—presumably, in bringing in these Supplementary Order Papers 274 and 26, was aware of the provisions in the Budget and was aware of what his own Cabinet and what his Government was doing. Presumably, that is addressed within these Supplementary Order Papers. Or, if the point is not valid, I think the people of New Zealand would like some assurance as to how those issues will be dealt with, because they are important issues.
We support the tenor of this bill because, of course, it is about aligning with Australia, and it is about bringing our regulatory relationship and our commercial relationships together. It is about attempting and doing that to make business easier—easier and more transparent for the entities on both sides of the Tasman. That is something that has occurred for a great period of time, going back beyond CER.
I think there are some lessons coming out of the Budget that need to be addressed. There are some actions the Government has taken that could directly impinge upon the legality and processes within this piece of legislation, so I invite the Minister to address those issues. There will be elderly folk who have now, of course, been shocked in recent days by the announcements of this Government having gone back on its word, and who will now be listening to this debate tonight and wondering, for instance—especially rest home providers—whether this legislation will impinge upon them in respect of the relationship with their counterparts in Australia or, indeed, in other places.
I also raise the other point that Mr Parker did, in terms of what controls there are in respect of information sharing. I would note that I would assume that there are some jurisdictions internationally that we would not want to share information with, perhaps. What are the controls or vetting procedures for receiving information and verifying it from some of those jurisdictions? Of course, we would not like to see the Crown’s name slurred internationally, even though it is in danger of that, at least domestically, with some of the provisions in this Budget.
The other point I would make is this: in terms of monopolistic behaviour, we know in Australia there are also great young entrepreneurs called paper boys and paper girls, and they are indeed paid for their service. I am not sure, but I think their tax provisions are far more generous in Australia—
Michael Woodhouse: I raise a point of order, Mr Chairperson. Saying that comments are germane to the bill does not necessarily make them so, and I fear that the member speaking has drifted far too far outside the boundaries of this legislation.
The CHAIRPERSON (Lindsay Tisch): I am the judge of relevance in this matter, and I will ask the member to speak on Part 1 from now on.
Hon CLAYTON COSGROVE: Thank you, Mr Chair. I completely note—as does the House—the quality of your rulings. I know that the inexperienced souls—some of them on that side—will be learning from your learned judgments—
Maggie Barry: We certainly don’t learn from you, except what not to do.
Hon CLAYTON COSGROVE: —in respect of this bill. Hang on! That was a bit of a dandelion at the back of the garden, I think, over there, who decided to wake up. You know, the eyes have opened, the blood is now pumping, and the air is being pumped through. Well done! As I said the other night, Miss Barry, go on gardening leave. You will be far more qualified for that than you are in this House with your contributions. The best contribution that member made was to try to intimidate submitters at a select committee, but moving back to Part 1—
Maggie Barry: Go and get a hairdo.
Hon CLAYTON COSGROVE: I may be light in the hair, that is true, but it is all real and it ain’t dyed.
Let me say this: in Australia we have young entrepreneurs, as we do in New Zealand, called paper boys and paper girls. We also have young entrepreneurs who do after-school work, of course. In Australia or in New Zealand, one could argue that it would be hard for monopolistic behaviour to occur between those entities across the Tasman, but it is an interesting question to ask, given that the tax arrangements are far more generous in Australia, and given that Australia does not have a Government that has decided to tax every dollar, every cent, that young entrepreneurs decide to make, whether it be $1 or $45 or whatever.
So, again, I make the same point to the Minister in respect of the rest homes. If, say, a paper boy or paper girl was a part of a company delivering the local newspaper, and that company was perhaps to engage in monopolistic activity and those employed by, say, Independent Newspapers or Fairfax in New Zealand were to engage in similar activity, what would be the provisions that would be invoked? And could the Commerce Commission and the Australian regulator then investigate those entities, poor though they will be, of course, given the Draconian legislation this Government has put forward in respect of taxing them? Would the provisions of this bill apply? I think it is a fair enough question to ask, because the poor old young people have been kicked in the guts once in the last 2 weeks. They used to be able to earn 45 bucks a week without tax. Now these scrooges have come along and pulled the rug out from under them, and pulled the pin. So I think we would not want to scare those fine young entrepreneurs.
The Government said once, many, many years ago, that it wanted to encourage entrepreneurship and a brighter future—many, many years ago. It does not mention those words now, of course, and it has a harder job mentioning them when it is actually discouraging entrepreneurship, as it did in the Budget. But I think that is a fair question to ask. We are giving these regulators substantial powers in this legislation. Will they apply to those rest home companies or to those companies employing paper boys and paper girls? Will those provisions apply, and to what extent? And regarding the quality of information, which jurisdictions will we not be prepared to share information with? My colleague Mr Parker mentioned Fiji.
These are germane questions, and I invite the Minister to look at them very carefully, respond, and give some assurance to the Committee—in terms of both the young folks and those in their retiring years—as we go through it.
Peseta SAM LOTU-IIGA (National—Maungakiekie)
: I take this opportunity to first say talofa lava, which is Samoan. It is Samoan Language Week, and it is an especially significant week this week because it is also the 50th jubilee celebrations of Samoan independence. So talofa lava to you and to our listeners at home and all the viewers around the country.
I am honoured to speak on the Commerce Commission (International Co-operation, and Fees) Bill, and I want to bring the discussion back to the bill. It is an important bill because this bill is consistent with the Budget that we have heard being debated tonight.
It is consistent with the goals of a Government that is looking to put this country back on track to recovery. After 9 long years of the Labour Government, where the last 5 years of that Government saw exports contract, this bill directly impacts the ability of our firms, companies, and organisations in this country to operate effectively in its trading markets and, in particular, the Australian market.
The proposals in this bill are part of the single economic market reforms. It started with the John Key Government in 2009 when he led a mission to Australia, alongside other Ministers in commerce portfolios, where they got around the table and looked at how they could make our countries prosperous, and how they could work together to develop a single economic market to allow both countries to prosper. The bill enables greater cooperation between our regulatory bodies.
I acknowledge the Minister in the chair, the Hon Craig Foss, who is the Minister responsible for the Commerce Commission, and the fine work that he does as our Minister of Commerce, following on, of course, from the Hon Simon Power, who was the Minister in charge of bringing this bill together, along with the Hon Lianne Dalziel. It is part of improving our export markets. We know that this Government’s plan to open access to export markets is part of the recovery process. It is about building a more productive and competitive economy. So what do we do? It is about our firms operating overseas. It will allow the Commerce Commission to work effectively with the Australian Competition and Consumer Commission and other regulators to look at unfair trading practices, as well as other anti-competitive behaviours.
The cooperation between the regulators will involve some degree of information sharing. This Government is actually focused on information sharing to provide efficiencies in Government. We saw that with the welfare reform bill, which allows for information sharing between the Ministry of Education and the Ministry of Social Development. We saw it with the information-sharing bill, which I understand is being worked on by the Justice and Electoral Committee. By sharing information, the regulators are able to more effectively monitor those companies that exhibit anti-competitive behaviour—monopolistic behaviour—as well as unfair trading practices.
What is it about? Well, yesterday I visited one of my businesses in my electorate.
Hon Clayton Cosgrove: Did they recognise you?
Peseta SAM LOTU-IIGA: For the member opposite, who continues to say that Maungakiekie is in South Auckland, I say it is not. It is the heart of Auckland. It is the centre of Auckland. It is the heart of manufacturing, not just in Auckland but in this country, with companies like Rakon, Coca-Cola, and BSL Buckley Systems. They are big companies that actually provide jobs and opportunities for not just my local people but also people across Auckland. Maungakiekie is not in South Auckland; it is in the isthmus of Auckland, between Onehunga and Panmure.
What is our ambition? Our ambition is to remove the barriers to trade. Removing anti-competitive practices allows those firms that want to operate in foreign markets to have an equal footing. When we heard the seven submissions that came before the Commerce Committee we were concerned as a committee that this information sharing would allow for quite confidential and privileged information to be shared not just across borders but also to non-governmental organisations. They may be regulators, but they are not Government organisations. We were concerned that that would be the case, but we were reassured by officials that in the regulator to regulator exchange of information there would also be provisions to work with the Foreign Affairs Ministries in both countries and to work with Government organisations in order to facilitate the effective and efficient exchange of that information. That enhanced cooperation is about detecting and successfully penalising overseas-based parties that contravene this Act and other provisions of our commerce legislation.
Why is it important? It is important because it promotes fair trade in domestic markets as well as in our foreign export markets. It is also about promoting competition in our local markets. As I said, when I visited this business yesterday, Baxter Healthcare, which operates in both markets, has plants and pharmacies in both countries, and has distribution networks in both countries, part of its concern was that it wants a regulatory framework that is consistent between the countries so that it understands that when it trades, and when it produces and manufactures its goods, it has a level playing field—a consistent playing field—not just between Australia and New Zealand but also with other foreign jurisdictions that this bill also affects.
We heard those concerns about the regulator to regulator exchange of information. We were reassured by the officials, and I am confident that this bill will actually promote effective and efficient markets. It is a bill that certainly had cross-party support during the select committee process. It is a bill that I believe continues to have that cross-party support. It is in the best interests of our international trading relationships, especially with our biggest trading partner, Australia, that we have these single economic markets and that we have consistent law between the two.
May I just add my own word of caution to this debate and the discussion we have had here tonight. It is certainly my view that we do not just adopt Australian legislation in toto and that we kowtow, I suppose, to Australian legislators. I think we are a Sovereign nation, and we need to continue to develop our own law independent to that of our trading partners. When I look at this bill, and when I considered this bill at length with my colleagues in the Commerce Committee, I believe that the bill is in the best interests of our country, and certainly in the best interests of my local manufacturers and those that trade with foreign countries. I certainly commend this bill to the House. Thank you.
Hon LIANNE DALZIEL (Labour—Christchurch East)
: Like many of my colleagues, I was not prepared for the debate on this bill, the Commerce Commission (International Co-operation, and Fees) Bill, to proceed at this particular time. I have all of the submissions that the Commerce Committee received sitting upstairs in my office, and I did not have time to go and get those. But, of course, I will be able to bring them down for my second call, after other colleagues have had their go on this particular matter.
I just want to comment on a point, though, that Peseta Sam Lotu-Iiga made in his contribution to the debate, which was to reflect on how this bill ties in with the Budget. I just want to remind the Committee that this bill was introduced actually when I was the Minister of Commerce, on 9 September 2008, and it did not get its first reading until 25 May 2010!
Hon Clayton Cosgrove: So why the rush now?
Hon LIANNE DALZIEL: So why the rush now? I think that starts to expose a little bit of what has really been going on here tonight. Why did the Government suddenly call an adjournment to the Budget debate and hold it over so that this “urgent” piece of business could be dealt with? We have had the Minister in the chair, the Minister of Commerce, take one very brief call and we have had the deputy chair of the select committee, as he was then, take another call. It does not seem to me like the Government is really getting in behind this legislation.
I do want to call to account, though, one of my own colleagues—not the spokesperson on commerce, of course, who is a very good spokesperson, indeed; much better than the last one. The person I want to pull up is the person who said that it sat at the select committee for a long time. It did not. It was referred to us, as I say, on 25 May 2010, and we reported it back on 22 November 2010. That was before the last election and now we are dealing with the Committee stage in May—and, actually, it is June at
the end of the week. It seems to me that if this was such an urgent piece of business for the Government it would have gotten on to it well before now.
Hon Clayton Cosgrove: Gerry sat on it.
Hon LIANNE DALZIEL: I do not think the thought of Gerry Brownlee sitting on anything is quite the appropriate mind’s eye that I want to bring to this particular piece of legislation.
The bill has an interesting history, though. It goes back even further. The original discussion document was put out in 2004, and, in fact, as a result of the discussion paper that went out, and a good deal more consultation with affected parties and those who had an interest in these matters—with feedback going back to Cabinet in 2005, and then, indeed, further decisions in 2007—it was decided that there would be this new legislation, which we introduced in 2008. But what is really interesting—flowing on from the comments that the member made about engagement with the Australians on this matter, and why this is suddenly so imperative—is this: do you know when Australia introduced its amendments to the Australian Competition and Consumer Commission so that the New Zealand Commerce Commission could have a cooperation agreement with the Australian Competition and Consumer Commission? Australia did it in 2007, which was when we made the decision to do precisely the same thing, and that was why we introduced the legislation in 2008.
But it is now 2012. We have had this slippage, and all we have had from the other side is a sort of attack from the previous speaker that did not seem to be very well directed, because I think there is a degree of looking in the mirror that is required when considering how we have progressed this bill since it has come to the House.
It has also been several months since it was at the select committee, so I have had to use my iPhone—new technology—to find the relevant submission I have been looking for. I think Russell McVeagh made a very interesting point. It talked about how the bill talks about only compulsorily acquired information. That is the area that I think the Minister should give a little bit of feedback on to the House so that we have got it on the record here. The concern was that the commission would in fact use section 98 notices at a time when it already knew that information could be disclosed under a section 98 notice. Of course, you can see from the legislation itself that, in fact, you can provide compulsorily acquired information and investigative assistance only in accordance with sections 99H to 99J. That means that you have to look at the definition of it being compulsorily acquired. Under the definition in section 99C in clause 6, “compulsorily acquired information” has to be information acquired under a section 98 notice or under one of the other provisions—yes, sections 98, 98A, or 98H. So the three provisions are included in the “compulsorily acquired information” definition.
But what Russell McVeagh were concerned about was that in a leniency process a company may, in fact, disclose that certain information was available, and what Russell McVeagh were highlighting was that the commission could then issue a section 98 notice and it would meet the requirements of the compulsorily acquired information as the basis for issuing that information to an overseas jurisdiction. So something that was made available in a voluntary sense could become compulsorily acquired information if, in fact, the Commerce Commission were to use section 98 in that way. I think it would be very useful—we were absolutely persuaded at the select committee that the commission would not do that, but we really would like to have the Minister on the floor of this Chamber actually put it on the record that the Commerce Commission would not do that.
When we switch to the provision—section 99H—that actually talks about providing compulsorily acquired information, apart from the protections around the Government to Government agreement and the regulator to regulator agreement, you have to look in
each case as to whether it is “likely to, assist the recognised overseas regulator in performing its functions or exercising its powers in relation to competition law; and (b) the provision of the information … will not be inconsistent with the cooperation arrangement.”, and then there is a prejudice provision around trade interest. But if we actually look at that, at that point the concern of the regulator in New Zealand becomes the concern of the regulator overseas. So if the regulator in New Zealand originally knew of the existence of the information because of the voluntary disclosure of it under a leniency process, there was concern that that would then become compulsorily acquired information.
There were not that many submissions that came before the select committee, but I thought that Russell McVeagh had put a lot of thought into its submission. It was actually arguing that this law was necessary. So it was not arguing against the law; it was just raising a particular concern about how the law could operate in practice, and that it could mean that an overseas regulator would really want our regulator to be doing its job for it in a way that was not necessarily going to enhance our position in terms of protecting the interests of New Zealand consumers in terms of any anti-competitive behaviour between different companies.
I really do think it is worthwhile raising this as a particular issue, and having the Minister place on the record of the House how he would see the Government responding to that particular concern, which was raised at the select committee. As I say, there were not that many particular submissions on the subject, but I felt that this one had some merit. They did appear in front of us, as I recall. If I had my notes in front of me I think I would have had—
Hon Clayton Cosgrove: Why do you not have them?
Hon LIANNE DALZIEL: I did not really have time to get my notes, Mr Cosgrove, because I was not expecting this bill to quite come up as soon as this. But when I come back to the Chamber for another couple of calls on this particular part, then I certainly will have the detailed notes with me and I will be able to be assisted—
Hon CRAIG FOSS (Minister of Commerce)
: I acknowledge that this bill, the Commerce Commission (International Co-operation, and Fees) Bill, has been in gestation for quite some time, and members have acknowledged that it was introduced by the previous Labour Government and the previous Minister of Commerce. In defence, I guess this new Minister of Commerce is making good progress, having had this bill for only 6 months. A few points have been raised by members, and the member Lianne Dalziel did well to find that on her iPhone.
There are safeguards in place for the use of information-gathering powers in the bill. Of course, there is a judicial review available in reference to this, and I will go through some of this in a bit more detail in a moment. There are existing incentives on the commission to protect the confidential information received and the leniency provisions, as this is standard practice around the future supply of information.
Let me explain it a bit further, because others have raised similar issues. The cooperation arrangements, which members have started asking questions on, are set out in sections 99D, etc., in Subpart 1, inserted by clause 6, for the various parts of the different Acts where this eventually, with the permission of the House, will get split out to. The commission can assist overseas regulators, in the first instance, with its statutory powers or through passing on compulsorily acquired information only if a Government to Government cooperation arrangement is already in place. This ensures reciprocity of the intent from the start. So, as I said in my earlier speech, the hard work here is done up front—the rules, the terms and conditions, of the pre-existing arrangement for Government to Government, or the regulator thereafter, to share information.
Before entering into a cooperation arrangement, the responsible Minister must take into consideration public interest matters such as the legal framework of the overseas jurisdiction and the potential consequences for New Zealand businesses and consumers of the proposed arrangement. The Minister must also consult with the Privacy Commission on any privacy issues. The content of the arrangement must be set out as to how any compulsorily acquired information may be used and kept secure. To provide transparency, cooperation arrangements must be gazetted and a copy should be posted on the commission’s website. So I hope that provides a little bit of information to those who were concerned about some of those issues.
A member, Mr Williams, earlier had concerns that sometimes requests may be deferred or asked of the Ministry of Foreign Affairs and Trade. He shared with us some of his thoughts about those issues. I would just like to point out that that came from a recommendation from the select committee process, but it is fair enough that he brought the issue up. I want to highlight that the Commerce Committee recommended changes to require the commission to be satisfied that the provision of assistance under the bill will not prejudice New Zealand’s international trade interests. If, after consultation with the Ministry of Foreign Affairs and Trade, the commission considers a request for assistance or information has significant trade consequences for New Zealand, then the commission must refer the matter to the Minister of Trade. The Minister of Trade then decides whether the request for assistance should be accepted. So hopefully that alleviates some of the concerns that the previous speaker, a few speeches ago, raised.
There have also been some questions asked about the protecting of privileged information. Just quickly, I say that to encourage sharing of privileged information, the bill strengthens its protection. It does this by providing that information that is privileged in the hands of the commission will continue to be privileged, even if the commission provides the information to an overseas regulator. Also, if privileged information is received from an overseas regulator, it remains privileged in New Zealand. To protect information provided in confidence to the commission, in relation to settlement negotiations, this will not be able to be provided to overseas regulators without the consent of the parties.
So I acknowledge the concerns and the issues that submitters obviously raised—and it is fair enough if the member cannot remember if they appeared or if they were written submissions; I do not know either—but, again, the intent about the sharing and the intent of this bill, and the good consideration that the committee and this House are giving to it, should ensure and alleviate those concerns around the House.
Dr DAVID CLARK (Labour—Dunedin North)
: Talofa lava. I recognise that it is Samoan Language Week, and it is a joy to be able to open with a greeting of that nature. I, like my colleagues, was expecting the Budget debate to continue for much longer this evening and I was expecting to speak in the Budget debate, so I am a little disappointed that Mr Brownlee saw fit to change the order of events from what had previously been agreed. One might speculate—although now is probably not the time to do it—that perhaps it was because the debate was not going in the direction that the Government wanted. I understand there was some discussion of school ratios, which is obviously a hot topic right now.
We have seen where the Budget debate has been so far, as we passed legislation that picked the pockets of paper boys and did asset-testing thresholds. We can see there are no big ideas in the Budget, no big ideas in the Budget debate, and we can perhaps conjecture that it is in order to get away from that painful, slow torture the Government backbenchers present are facing, as they realise that their Ministers and their people on the front bench have few ideas as to how to grow this country and how to grow this
economy. They do not seem to have the pro-growth policies that we might expect from a Government.
Before I get too far into the Budget debate, which is not in fact the matter before us right now, I want to refer to the regulatory impact statement on this bill, the Commerce Commission (International Co-operation, and Fees) Bill, which took some time to locate. There is not one on the Table in the centre of the floor of Parliament. So I went to the Bills Office and asked whether they had a copy of the regulatory impact statement. I am wondering what kinds of costs this legislation might carry for New Zealand as we put an extra burden on those responsible at the Commerce Commission for collecting further information. It was actually quite hard to find any kind of regulatory impact statement. The one that I did locate, in the end, on the internet was one prepared by the Ministry of Economic Development in 2010. It went through the range of options before the Commerce Committee and discussed their pros and cons. I am not sure whether there is a further regulatory impact statement.
I will come back to the matter of the bill.
The CHAIRPERSON (Lindsay Tisch): We are on Part 1.
Dr DAVID CLARK: In terms of Part 1, I would very much like to know what are the costs involved. I wonder whether the Minister in due course could point us in the right direction. This bill has as its objective to increase—
The CHAIRPERSON (Lindsay Tisch): Order! We are not on Part 2. We are on Part 1.
Dr DAVID CLARK: Part 1.
The CHAIRPERSON (Lindsay Tisch): You cannot talk about fees. We are on Part 1. Fees come into Part 2.
Dr DAVID CLARK: The fees.
Hon Clayton Cosgrove: What about that MFAT issue?
Dr DAVID CLARK: In terms of the Ministry of Foreign Affairs and Trade—I will come to the Ministry of Foreign Affairs and Trade issue because one of the things raised in the regulatory impact statement that I did find was around the recommendations that the commission consult with the Ministry of Foreign Affairs and Trade if it received a request for assistance that has significant international trade consequences for New Zealand.
Hon Lianne Dalziel: The select committee wrote it into 99H.
Dr DAVID CLARK: Sorry?
Hon Lianne Dalziel: 99H.
Dr DAVID CLARK: 99H?
Hon Lianne Dalziel: So if you look at 99H, you will see the select committee wrote all those provisions in.
Dr DAVID CLARK: Ah, the select committee did write in these provisions. But the question in my mind now is whether, in fact, we will have the specialist skills in the Ministry of Foreign Affairs and Trade to service these requests, because we know that there has been $120 million spent on a restructure that has been bungled—
Hon Clayton Cosgrove: Gutted.
Dr DAVID CLARK: —gutting the Ministry of Foreign Affairs and Trade, and certainly bringing morale there to an all-time low. This is an important issue because we are attempting here to make sure that our international trade practices and obligations are met, but also that our New Zealand exporters are in a position, and our competitive companies are in a position, to be competitive—both to comply but also to be in a competitive position.
If we take an example, if we looked at competing delivery companies in two different countries, some in New Zealand might rely on young people to deliver items.
They may be earning under $45 a week, these young people, and they may be facing an increased tax burden in New Zealand, the paper boys and paper girls of this country.
NIKKI KAYE (National—Auckland Central)
: I move,
That the question be now put.
RAYMOND HUO (Labour)
: Like some of my colleagues, my mind was full of the Budget debate because I was due to take a call on the Budget right after my colleague David Clark. But suddenly everything has been reprogrammed or rescheduled. It appears that we were ambushed in this manner, like the senior citizens in New Zealand were ambushed by way of the rest home legislation that was rammed through the House last Friday under urgency.
I would like to touch on two main issues, and the very first one is in relation to the explanation given by the Minister in the chair, the Minister of Commerce. Before I give the details, I would like to say that Labour does support this bill, the Commerce Commission (International Co-operation, and Fees) Bill, which was originally introduced by the Hon Lianne Dalziel, a wonderful Minister. It was later adopted by the Hon Simon Power, and now by the rising star Minister in the chair, Craig Foss.
Hon Clayton Cosgrove: A falling star.
RAYMOND HUO: No, a rising star. He is one of the very good Ministers. The first issue is in relation to confidentiality or the protection of confidentiality. I believe, in my submission, that the Minister in the chair’s explanation is not sufficient enough to address some concerns as expressed by submitters—for instance, Vodafone, Telecom, and also Russell McVeagh, as mentioned by the Hon Lianne Dalziel. In general, allowing the Commerce Commission to share information with overseas regulators would generate greater risk of disclosure to third parties. Russell McVeagh is of the view that the bill as currently drafted goes significantly further than the cooperation agreements that are currently in place.
The safeguards provided in this bill may not be sufficient to adequately protect sensitive information exchanged between a corporate or an individual and the Commerce Commission from disclosure to overseas regulators. Common sense would say that once information leaves its hands, our Commerce Commission may well lose its ability and power to control the end-user of that piece of information. Therefore a greater clarity is required in respect of the circumstances in which our Commerce Commission can make use of its statutory information-gathering powers.
Further, greater ex ante controls on the provision of information to foreign regulators are necessary. Why ex ante? Ex ante means before the event, because unless there are control mechanisms in place prior to the event, it will be too late. If it is too late—in other words, where a breach of confidentiality by an overseas regulator occurs—are there any remedies available to the victim or victims? Practically, there would be very few, if any, according to Vodafone.
I agree with Vodafone’s submission that once information is disclosed to overseas regulators, the New Zealand Commerce Commission itself has very little ability to ensure its continued protection. Also, there is no ability for a party to appeal against the commission’s decision to make disclosure to the overseas regulator in the first place.
In its current form, the bill provides that the Commerce Commission may impose conditions on the provision of information to overseas regulators. Vodafone, in its submission, requested that if information is given to the commission in confidence, the bill should require the commission to protect that confidentiality to the greatest extent possible.
That brings us to the next question, concerning the use of existing or historical information by the New Zealand Commerce Commission. It is not clear whether the information-sharing powers under this bill are intended to have retrospective effect. In
its current form, it is not clear, so that is why I wish the Minister in the chair would take a call to give us further explanation as to the retrospective effect of this particular bill.
The submitters’ view is that the bill needs to be amended to provide that information that has been compulsorily acquired by the New Zealand Commerce Commission prior to the date of enactment may not be shared with an overseas regulator. Without this clarity the bill poses a risk that the New Zealand Commerce Commission could apply the bill with retrospective effect. Russell McVeagh’s view is valid that, firstly, historical information should be defined in the bill and the New Zealand Commerce Commission prevented from making use of that piece of information; and, second, the bill should provide more clarity, although the issue can be resolved with reference to the Interpretation Act 1999, which requires that an Act is presumed to not have retrospective effect. Thank you.
MARK MITCHELL (National—Rodney)
: I move,
That the question be now put.
The CHAIRPERSON (Lindsay Tisch): The question is that the question be now put. Those of that opinion will say Aye—
Hon Clayton Cosgrove: I raise a point of order, Mr Chairperson. I know you are in the process of calling the vote, but I will just call your attention to my colleague who has been seeking a call and has not had a call on this at all.
The CHAIRPERSON (Lindsay Tisch): No. I am the judge of the number of calls and we have been going for well over an hour and a quarter—
Hon Damien O’Connor: Point of order, Mr Chairman.
The CHAIRPERSON (Lindsay Tisch): I am ruling. We have been going for well over an hour and a quarter and I am accepting the closure motion.
Hon Damien O’Connor: Point of order, Mr Chairman.
The CHAIRPERSON (Lindsay Tisch): No. I am accepting the closure motion. The question is that the question be now put. Those of that opinion will say Aye—
Hon Clayton Cosgrove: Point of order.
The CHAIRPERSON (Lindsay Tisch): You are trifling with the Chair. I have already ruled that I am accepting the closure motion.
Hon Clayton Cosgrove: I raise a point of order, Mr Chairperson. With respect, I am not challenging that. You have to accept a point of order, and you can rule it out once you have heard it. Can I say this to you. You are correct: we have had an hour, or whatever you specified. However, you will also be aware that an arrangement was put in place between the parties—
The CHAIRPERSON (Lindsay Tisch): That is not a point of order. Listen, there have been 14 calls for the Opposition and four for the Government. In terms of relevance, I have listened very closely. I have ruled accordingly well over the hour and a quarter as to relevance and it is time for the closure motion.
Hon Damien O’Connor: Point of order, Mr Chairperson.
The CHAIRPERSON (Lindsay Tisch): No, I am not accepting it again. The member will sit.
Hon Damien O’Connor: Point of order, Mr Chairperson.
The CHAIRPERSON (Lindsay Tisch): If you are trifling with the Chair, it will be the matter—I call the Hon Damien O’Connor.
Hon Damien O’Connor: I raise a point of order, Chairperson. I have not had a call on this and—
The CHAIRPERSON (Lindsay Tisch): I know you have not had—
Hon Damien O’Connor: —the point is that—
The CHAIRPERSON (Lindsay Tisch): Sit down. Sit down. You have not had a call; I know that. But then you have not been here the whole time, either, and there have
been plenty of opportunities to take a call. I have looked around at who has got up to take a call. That is the end of the matter.
Hon Members: Point of order, Mr Chairman.
The CHAIRPERSON (Lindsay Tisch): If you trifle with the Chair, I will ask you to leave the Chamber. One more.
Hon Clayton Cosgrove: I raise a point of order, Mr Chairperson. I am not trifling with the Chair, but there is a point that I ask you to reflect on. Mr O’Connor has been in the Chamber for a considerable period of time. All members have been enthusiastic on this side to take calls—
The CHAIRPERSON (Lindsay Tisch): I thank the member for those comments. I have ruled. I have given the Opposition 14 calls. We have been going for well over an hour and a quarter, and I am accepting the closure motion.
A party vote was called for on the question,
That the question be now put.
||New Zealand National 59; New Zealand First 8; Māori Party 3; ACT New Zealand 1; United Future 1.
||New Zealand Labour 34; Green Party 14; Mana 1.
|Motion agreed to.
- The question was put that the amendment set out on Supplementary Order Paper 274 in the name of the Hon Craig Foss to Part 1 be agreed to.
- Amendment agreed to.
- Part 1 as amended agreed to.
Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman)
: In the absence of being able to speak on the important Part 1, I will take a call on Subpart 2, “Amendment to Credit Contracts and Consumer Finance Act 2003”. All these amendments here in the application of the Commerce Act relate back, of course, to Subpart 1, where we have provisions relating to the acquisition of information from a foreign jurisdiction and our obligation through reciprocity to provide information to the relevant regime in that country.
The issue is—not only in relation to the Credit Contracts and Consumer Finance Act but, in fact, in relation to any piece of legislation—what we will be obliged to provide and what we will be trading off. It said in one of the provisions, new section 99H(2)(c) in clause 6, that “the provision of the information or assistance will not significantly prejudice New Zealand’s international trade interests.” We have to assume that the Commerce Commission is satisfied that New Zealand businesses are not compromised in any way.
It is all well and good to have such an arrangement and a reciprocal arrangement, but I have to say with some pride that there are not many countries around the world that have such sound, such ethical, and such consistent systems as we do here in New Zealand. I think that is something that each and every one of us can be proud of. The problem is that if we are dealing with other jurisdictions and we are obliged to provide information, be it on the Credit Contracts and Consumer Finance Act or any other, then we may in fact be compromising the trade obligations and objectives of this country. So I would ask the Minister in the chair, the Minister of Commerce, maybe to clarify whether in the event that we are asked for such information, be it under this particular
Act referred to in Subpart 2 or any other Act, the Government will make a call in the best interests of New Zealand. I have to say we can look around for examples of where the Government stood up, where it thinks it might want to protect New Zealanders. Take, for example—and it does relate to a situation that might arise through Subpart 2—the Government having to make a call—
The CHAIRPERSON (Lindsay Tisch): Part 2, not Subpart 2.
Hon DAMIEN O’CONNOR: Sorry?
The CHAIRPERSON (Lindsay Tisch): We are on Part 2, “Fees”—clauses 12 and 13—not Subpart 2.
Hon DAMIEN O’CONNOR: Thank you, Mr Chairman. I appreciate your guidance there. I would like to say that if the Government is prepared to make a call, then it probably would have done so on the issue of pork importation. I know it is a bit of a stretch, but the question is whether the National Government will make the calls that uphold and protect the rights of New Zealanders in arrangements of reciprocity with other jurisdictions. I think that most people in this House come to Parliament because they want to do the best thing for New Zealand, and although we have trade obligations, we need to ensure that we do the right thing. As you know, Part 2 relates to fees, and this Government has been—
Hon Clayton Cosgrove: Rabid.
Hon DAMIEN O’CONNOR: —rabid, I would say is the best word, on fees and costs, claiming that it is reducing them across the board. The reality is that it has pretty much pushed up fees and costs on every single part of central government jurisdiction.
- The Chairperson reported the Crown Entities Reform Bill with amendment, and that the Committee had divided it into three bills, and progress on the Commerce Commission (International Co-operation, and Fees) Bill.