Hon CRAIG FOSS (Minister of Commerce)
: I move,
That the Commerce Commission (International Co-operation, and Fees) Bill be now read a second time. I also move that the House take note of the Commerce Committee’s report on the Commerce Commission (International Co-operation, and Fees) Bill.
Global business is becoming increasingly complex with the growing interaction and collaboration between businesses under multiple jurisdictions. This bill seeks to authorise the Commerce Commission to assist equivalent overseas regulators in the enforcement of competition and consumer laws. One of the key underlying principles of the bill is reciprocity. If the commission is able to provide investigative assistance to overseas regulators, this will provide the opportunity for overseas regulators to do the same. Over time, this should promote deeper cooperation efforts between the Commerce Commission and overseas regulators, which would promote a more effective and efficient investigation and enforcement of competition and consumer laws.
The bill fulfils part of New Zealand’s duties under the single economic market framework jointly announced by Prime Ministers in August 2009. Australia enacted legislation in 2007 to allow enhanced cooperation between the Australian Competition and Consumer Commission—the ACCC—and overseas regulators. The Commerce Commission (International Co-operation, and Fees) Bill is our equivalent legislation.
I would like to acknowledge that this bill was introduced by the previous Labour Government under the former Minister of Commerce the Hon Lianne Dalziel. I understand that at the time it enjoyed, and I hope it continues to enjoy, broad cross-party support. The bill will serve to strengthen and build upon New Zealand’s existing cooperation and coordination efforts with Australia in the effective application and enforcement of competition and consumer laws.
The bill amends the Commerce Act, the Fair Trading Act, and the Credit Contracts and Consumer Finance Act to enable the Commerce Commission to use its statutory powers to assist the Australian Competition and Consumer Commission or other overseas regulators with investigations. It sets out how the commission may share compulsorily acquired information and provide assistance to regulators from Australia and other countries. Importantly, the bill has safeguard provisions requiring the commission to take specific public interest matters into account before responding to requests for assistance from overseas regulators to ensure that assistance is provided for a proper purpose.
A Supplementary Order Paper to the bill has been tabled to amend the Telecommunications Act in order to promote enhanced cooperation between the Commerce Commission and overseas regulators in respect of telecommunications investigations. This would enable the commission to participate in investigations into cross-border telecommunications markets, such as those related to international mobile roaming. The amendment would reflect the powers held by the Australian Competition and Consumer Commission in respect of its telecommunications work, and would also enable New Zealand to further reciprocate the assistance that Australia can provide to us. I intend to move Supplementary Order Paper 26 during the Committee of the whole House stage. I note that because of changes to the Standing Orders, the amendment set out on this Supplementary Order Paper, which was tabled before the last election, can now be considered without leave of the Committee of the whole House.
At the first reading of the bill the Commerce Committee was invited to consider several issues regarding the bill’s application, and I am pleased to see the committee has
taken these matters into account and recommended amendments to the bill. More specifically, the committee has recommended that regulator to regulator cooperation agreements should be allowed as an alternative to intergovernmental arrangements. I consider that this will provide flexibility to decide in the most appropriate and efficient way to implement mutual assistance arrangements. This also recognises that different jurisdictions also have different requirements about how mutual assistance arrangements are implemented. For example, Australia does not prescribe the level at which a mutual assistance agreement is implemented, but the United States requires such arrangements to be conducted at a Government to Government level.
I am pleased to also note the committee’s recommendation regarding information-sharing situations where significant international trade concerns may arise. In particular, the committee recommends that in such situations the Commerce Commission will consult with the Ministry of Foreign Affairs and Trade and with the Minister of Trade. This will enable the consideration of possible prejudicial effects on New Zealand’s international trade interests. Importantly, it will ensure that the commission will provide assistance that aligns with our international trade interests.
The committee has also recommended amending the bill so that it covers compulsorily acquired information that has been acquired both before and after this bill’s passage. This ensures that information able to be provided cannot be excluded by the presumption against retrospectivity. In the interests of keeping the legislative framework consistent, I note that the committee has recommended amending the bill to ensure that protections in relation to the use of statements is targeted to those statements that are self-incriminating. This aligns the bill with the provisions of the Commerce Act, as well as with the proposed amendments to the Fair Trading Act. I am of the view that the committee’s recommendations will improve the effectiveness of the bill, both in fostering greater cooperation with overseas regulators and more effective enforcement action as well as in safeguarding the public interest.
In summary, I am confident that this bill will play an important role in promoting and deepening mutual assistance between the Commerce Commission and overseas regulators in enforcing competition and consumer law. Given the harm that anti-competitive and unfair trading practices can have on individuals, businesses, and the economy as a whole, I consider that ensuring the commission is equipped with the modern tools for combating such behaviour in the global economy of today is essential. This is even more important in the context of supporting the Government’s objective of fostering a single economic market with Australia. As such, I would like to conclude by thanking the members of the Commerce Committee for their work in considering the bill and by acknowledging the contributions of those who provided submissions on the bill. I commend this bill to the House.
Hon CLAYTON COSGROVE (Labour)
: This is one of those rare occasions in the House when there is unanimity in respect of legislation. This bill, the Commerce Commission (International Co-operation, and Fees) Bill, is a common-sense piece of legislation, and I simply reiterate the sentiments of the Minister of Commerce. We have for some time, over many years going right back to the initiation of CER, attempted to get closer to our Australian cousins. A predecessor of mine, Mike Moore, once said that Australians are our best mates whether we like them or not, and there is a bit of truth in that, I suspect. But any measure that brings us closer together economically, deals with monopolistic behaviour and anti-competitive behaviour, and deals with unfair trading practices has got to be mutually beneficial and agreeable to both partners to the deal—that is, obviously, our Australian counterparts, others, and us.
It is often because we are a small country. I believe 97.2 percent—according to a question that I posed to the Hon John Banks, that venerable Minister for Small
Business—of businesses in New Zealand are small to medium enterprises, going by the Government, or the Inland Revenue Department, definition of 20 staff or fewer. It is often those entities that struggle, if they are engaged in exporting, to come to terms with intercountry trading practices in respect of monopolistic behaviour, anti-competitive behaviour, and unfair trading practices. Anything that this House can do to bring the jurisdictions closer, to alleviate those sorts of issues, or to deal with them in terms of enforcement and in terms of consumer law and competition law and effectively to implement that has got to be good for both sides of the Tasman, but particularly for our own businesses and commercial enterprises in New Zealand.
The Minister did note, quite rightly, that when this legislation was in the embryonic stage it was a product originally introduced by the then Minister of Commerce from our team, Lianne Dalziel, and it was adopted by the Minister Simon Power and now by Mr Foss. It is beneficial for what we are trying to do in terms of harmonisation, and there has been a great history of harmonisation in commercial banking terms, to some extent in our law, and in other areas. All these harmonisation moves make it easier for business to be transacted internationally.
We expect this bill to facilitate greater reciprocal assistance from equivalent overseas regulators. It is increasingly important for a number of jurisdictions and, as the Minister said, it will allow either Government to Government cooperation arrangements or regulator to regulator arrangements, subject to ministerial approval, which is a provision that has been inserted by the Commerce Committee.
If you look at some of the rationales behind this legislation, the international nature of transactions and territorial limits on regulators make it increasingly desirable for regulators to cooperate to manage competition, as we have said, and consumer effects of transactions on domestic markets. The Commerce Commission, of course, is currently constrained from providing investigative assistance and compulsorily acquired information it holds to overseas regulators. The commission’s statutory powers of compulsion can be used only in relation to enforcement and adjudication within the New Zealand jurisdiction. That, of course, is a major limiting power. There are also legal constraints on the provision to overseas regulators of confidential compulsorily acquired information already held by the commission. This in turn limits the willingness of overseas regulators to provide assistance to the commission, as cross-jurisdictional assistance tends to be based on mutual assistance. Most overseas regulators, of course, consider the likelihood of reciprocity as a factor in determining whether to provide assistance or information to the commission. This is going to create increased flexibility, this is going to create enhanced cooperation between the commission and overseas regulators in a number of jurisdictions, and it seeks to do this while ensuring that there are appropriate safeguards in place to address public interest considerations.
I think the select committee gave this incredibly detailed scrutiny. There were a number of concerns raised in respect of telecommunications. It was the submission of the Commerce Commission, and its request that this bill also apply to information gathered under the Telecommunications Act 2001. I note that Telecom and Vodafone were opposed to the inclusion, which is included in the Australian legislation, and this has been incorporated by way of the Supplementary Order Paper. The select committee has recommended a consultative procedure where the commission is concerned that requests for assistance might have significant international trade implications. The commission may consult the Minister of Trade after consultation with the Ministry of Foreign Affairs and Trade, and then rely on a statement from the trade Minister as to whether providing the information or assistance would significantly prejudice New Zealand’s international trading interests. Before providing such information the
commission would have to be satisfied that the information would not significantly prejudice those trading interests in respect of New Zealand.
There will be a need, I think, for the Government to provide some support to commercial entities, as it should do when new legislation is brought in, particularly legislation of this kind—education support, as it were. The big end of town, of course, will always come to grips with legislative change far easier than small to medium sized enterprises, for instance, that may be engaged in export and products and services. The big end of town tends to have far more resources, far more expertise, and a far bigger budget to call on resources, to change systems, and to come to grips with legislative change. The smaller end of town, small to medium sized enterprises, do need support, I think, to deal with this. I do not think this bill makes reference to that. As we go through this process in the House, we will be seeking some advice from the Government as to what sort of ancillary supports would be put round to ensure that small to medium sized enterprises are supported and can come to grips with this legislation, and with how to deal with it in their day-to-day practices.
As I said at the start, this is a pretty straightforward piece of legislation, but a necessary and important piece of legislation. It does have the support of the Labour Party. I believe the select committee worked very diligently and collegially to produce a high-quality piece of legislation. I am sure this will not turn the lights off and on too often in media circles and other places, but it is one of those mechanical pieces of legislation that is necessary to grease the wheels and to mow down some roadblocks for—being selfish for a moment—New Zealand enterprises as they try to battle it out internationally, and battle it out in jurisdictions where commercial entities from time to time do engage in anti-competitive behaviour and unfair trade practices. There are environments where there is monopoly behaviour. There is a need to have rules, there is a need to have a rule-based system, and there is a need to have mechanisms whereby regulators can cooperate to deal with those commercial evils, if you will, so that we can facilitate enterprise, innovation, and entrepreneurship in our country, across our borders, and in the jurisdictions overseas. So it is with some degree of pleasure that we simply add our words to the Minister’s. It has been a cooperative process. We look forward to this being expedited relatively swiftly, and we support the bill as it stands.
JONATHAN YOUNG (National—New Plymouth)
: Acknowledging the work of the previous Government in commencing this work is important, also the work of the Hon Simon Power, and now the work of the Hon Craig Foss. It is great that we can cooperate across the House, as we can cooperate across the Tasman, and we all want to work for the success of New Zealanders and Australasians in a world that is incredibly competitive, and increasingly so. As I noted in my first reading speech on the Commerce Commission (International Co-operation, and Fees) Bill, here in New Zealand we are a small trading nation. We export 85 percent of what we produce, so it is imperative that we have very good relationships, understandings, and regulations agreed to by our trading partners in order for us to have a level playing field. That is what I think most people, if not all people, in commerce look for—a level playing field. They want to have certainty. They want to know that if they can apply their resources, their hard work, and their capital, they have every chance of success. We know through the free-trade agreements that we are seeing developed that this is the sort of playing field that we want to create for New Zealand enterprise. One thing we are certain of is that we are an innovative nation. We are a nation of people who are hard-working, with great ideas, and with endeavours that can bring great success to this country.
This bill, which was introduced in September 2008, was adopted by this Government and carried forward because it is very much part of our agenda of focusing on improving access for our exporters to world markets. The Commerce Commission
(International Co-operation, and Fees) Bill amends a number of Acts of Parliament: the Commerce Act 1986, the Credit Contracts and Consumer Finance Act 2003, and the Fair Trading Act 1986, and it seeks to authorise the commission to share information with equivalent overseas agencies about unfair trading practices and, as the previous speaker mentioned, anti-competitive behaviour. This bill is part of the National-led Government’s focus on improving access for our exporters to world markets. Boosting innovation and improving export access is one of the key policy drivers for the ongoing rebalancing of the New Zealand economic performance that we seek to see happen.
It is known by all that only by lifting economic performance can we create the jobs, boost the incomes, improve the living standards, and provide the world-class public services that Kiwi families need. So though the intricacies and the mechanics of this bill may not be understood by many New Zealanders, the benefits of it will be. The benefits will flow through greater success in our companies.
We understand that the single economic market is a development that is important to the economies of both New Zealand and Australia. Under the single economic market concept, both Governments have been intensifying efforts to remove regulatory barriers to trans-Tasman trade. It was back in 2009 that both Prime Ministers—our Prime Minister, John Key, and the then Prime Minister, Kevin Rudd—agreed on the imperative for continued strong and coordinated international action to restore confidence in global economic growth, there in the midst of the global financial crisis. But that same commitment has been continued with the Rt Hon Julia Gillard. It was just over a year ago that a new investment protocol and a CER trade agreement was signed between both Prime Ministers. I will just quote what Bill English, our Minister of Finance, said regarding that. He said: “New Zealand and Australia have one of the most open bilateral economic and trade relationships of any two countries. This relationship is underpinned by CER, which is the oldest and most comprehensive set of trade access arrangements that either country enjoys.” He said: “Australia is both the single largest source of direct foreign investment in New Zealand and is the largest overseas destination for New Zealand investment.”
So in many regards we are joined with common necessity, but also common aspiration, that this corner of the world continues to succeed and be prosperous. It is recognised that strengthened trans-Tasman economic integration, including through the single economic market work programme, is vital for both. We are the third-best place in the world to do business, according to the World Bank’s estimations. But for that business success to be optimised, easy access to overseas markets is paramount for our country. With 85 percent of our products manufactured going to export markets, it is imperative that we have this easy access and that we have regulation that is harmonised to the very best of our ability, so that we create a level playing field for our enterprises here in New Zealand. We are committed to this process—very much so.
We need to offer a better policy environment if we are to overcome the economic disadvantages that our country has. Being small in size is one of them; our geographical isolation is another. If we want to attract and retain increasingly mobile talent—which can go anywhere in the world, but we want those people to stay here and we want to retain their skills here—and if we want to retain, encourage, and invite capital, technology, and entrepreneurship, then a better policy environment is what this Government determines and desires to provide to businesses in New Zealand. Regulatory reform is very much improving that, and this bill goes towards that as well, to create that environment where New Zealand companies can have a presence in the Australian market, and where the ease of business for them there is as easy as it is here. That is where we want to head, with a harmonisation of our commerce laws. I believe that this bill, which was progressed by the previous Government under Lianne Dalziel
and also under the leadership of the Hon Simon Power and which is now under the leadership of the Hon Craig Foss, is moving us very well and positively in that direction. I commend this bill to the House.
CLARE CURRAN (Labour—Dunedin South)
: I rise to speak in the second reading of this bill, the
Commerce Commission (International Co-operation, and Fees) Bill. I would like to make some comments on the importance of this bill and on what the Commerce Committee sought to achieve, where there were a number of considerations following the submitters that appeared before us, and then I would like to make some comments, taking up from the previous speaker, Jonathan Young, on the importance of harmonisation.
I would like to make the point up front that, the way I see it, this Government actually pursues harmonisation with our closest geographical neighbour across the Ditch when it suits it on very light-handed legislation, and not on other issues that are probably of equal importance to New Zealand’s economic situation and its future, particularly in fostering innovation within its own environment and competition.
But first of all I would like just to acknowledge, as I think previous speakers have, that this bill was introduced initially by the Hon Lianne Dalziel. It is important to acknowledge that. It was adopted by Simon Power and now by the new Minister of Commerce, Craig Foss. The select committee that heard it, I think nearly 2 years ago, was actually chaired by Lianne Dalziel—and very well chaired. It is good that we now have a new chair in place who seems to be doing a very good job. The Commerce Committee is a sensible committee. It treats every piece of legislation that comes before it very seriously, and takes into account the views of the submitters.
Although this bill aligns us with Australia, there were some quite serious issues raised during the discussion on it, which I want to just briefly touch on. There were some important submitters that came before it—namely, the Meat Industry Association, Meridian Energy, Vodafone, and Telecom. They pointed out some, as they saw them, significant issues in terms of the risks of having information being provided one way but not necessarily coming across the other way, and the risks for those organisations of feeling vulnerable in that situation and possibly being opened up to adverse circumstances.
The committee took that very seriously, and although you will see that there is a Supplementary Order Paper being put before the House on addressing the anomaly on the importance of including the Telecommunications Act under the ambit of this bill, the select committee also recommended that there should be a consultative procedure where the Commerce Commission had concerns that any request for assistance might have significant international trade implications that might adversely affect organisations within New Zealand. In those cases the commission may consult the Minister of Trade, after consultation with the Ministry of Foreign Affairs and Trade, and then rely on a statement by the Minister of Trade as to whether providing that information or assistance would significantly prejudice New Zealand’s international trade interests.
I think that was probably the most significant thing that came out of discussions in the select committee, because although we were committed to the harmonisation principle, we certainly did not want to see companies that trade and are active in New Zealand feeling disadvantaged by such a piece of legislation. The commission has to be satisfied that any information provided to comparable regulators overseas would not significantly prejudice New Zealand’s international trade interests. So that was seen as being pretty important, and I think it is important to acknowledge the good work that the committee did on this.
I would like to turn, though, to consideration of the harmonisation principle, because I have heard a previous speaker across the House talking about the importance of cooperating across the Tasman. I would certainly concur with that, particularly where we can have an advantageous arrangement and relationship with our Australian cousins. But the most important thing to acknowledge is that there is an awful lot of legislation and there is an awful lot in our current regulatory environment where there is clearly not harmonisation, and instead we are seriously out of step.
I would contend we have got our heads buried in the sand on a number of issues. I actually want to mention some of them, because with regard to this particular bill, which is based on a principle of harmonisation, that is pretty important, particularly around taking us into the 21st century and ensuring that we have got a competitive environment that truly fosters innovation with new technologies. There are some serious examples.
First of all, let us look at this Government’s refusal to countenance a converged regulatory environment for the telecommunications and broadcasting environments. We have currently got two Ministers across the House. We have got regulation for the telecommunications sector, but no regulation in the broadcasting sector, and instead we have got an absolute refusal to acknowledge the clamour for change that is coming right from across industry, from concern from the public, and from a number of other places.
When you look particularly at how this is affecting new technology platforms, where their success depends on companies, for instance, in the broadcasting sphere having access to premium content with the take-up of ultra-fast broadband, currently most of the rights to this content in New Zealand are held by a very small number of market participants. Instead, what we see from the current Minister for Communications and Information Technology and from the Minister of Broadcasting, who happens to also be the Minister of Commerce with the carriage of this particular bill that is concerned with the principle of harmonisation, is an absolute refusal to acknowledge that there needs to be any change, whereas across the Ditch, in Australia, we see a converged regulator, we see regulation for content, and we see a serious acknowledgment of the importance to embrace change.
In fact, right at this very moment, in the last couple of days, there has been a new review come out that was driven by the Minister over there, the converged Minister, on convergence, which is a huge step forward. Of course it is not going to be perfect. There is going to be a lot of public debate and discussion around it, but at least they are having that public debate and discussion, whereas here, this Government is actually trying to quash it and pretend it does not exist. The Convergence Review’s final report was released on Monday and its task was to develop a framework where all media communications could be regulated equally, regardless of whether it was distributed by radio, television, or the internet.
If we wanted to take harmonisation seriously, that is where we would be looking. We would be looking at ensuring that a similar review was undertaken here, that we were addressing these issues, that we were taking them seriously, and that we were not burying our heads in the sand. You have got to ask yourself why we are burying our heads in the sand, because essentially we will not go near these issues, and the reason, I put it to you, is that it is because there are too many vested interests involved. There are too many vested interests involved, with too much power, by too few organisations that can disproportionately influence Government policy.
With regard to the harmonisation and principle within this bill that is being debated today, upon which there is agreement across the House, it would be good to see some agreement across the House on some other issues. The lobbying bill—I would just like to mention the Lobbying Disclosure Bill, which is being put forward by the Greens.
That is certainly supported by Labour and a number of parties across the House that see that it is actually going to drive some important change and put the spotlight on the organisations that have disproportionate access to Ministers who are making decisions, important decisions, around policy and legislation, and it may actually start to reduce the cronyism and deal-doing that has dogged this Government’s behaviour in the last 3½ years. I put it to you that although politics is certainly about influence and influence is important, it should also be about conscience and ethics, and it is a sad fact that under this Government we are seeing very little of that.
So, just returning to this bill that is before us today, Labour certainly supports it. We support the values behind harmonisation and we would like to see harmonisation occurring on other issues, such as the convergence of broadcasting and telecommunications.
DAVID CLENDON (Green)
: I am pleased to stand to take a short call on this
Commerce Commission (International Co-operation, and Fees) Bill. My pleasure is only slightly spoiled by the fact that some members, who as recently as last night were bellowing that the Greens always oppose everything, are not here to see our agreeable side. The Greens are naturally agreeable people. We will always support well-thought-out legislation that does some good, does no harm, and achieves its goals. On that basis we are very happy to support this piece of legislation that we are debating today.
The bill before us has a fairly straightforward objective, but an important one: to harmonise and to allow a higher degree of cooperation between regulators in New Zealand and regulators elsewhere equivalent to our Commerce Commission. Particularly in Australia, of course, one of our key trading partners, it ought to be reasonably easily achieved given the similarities in the two countries’ culture and practice. Not to say it will be very simple, but clearly it is an appropriate ambition to enable that regulation of the wider market, the Australia - New Zealand market, initially. We know very well that in the absence of regulation, markets fail. We are still suffering consequences internationally, as well as in New Zealand, of aspects of unregulated and inadequately regulated markets that inevitably lead to enormous economic, social, and environmental costs. To the extent that this bill endeavours to get common approaches to regulation, to enable regulators to communicate and cooperate with each other, that is a good thing and it is likely to enhance the potential for genuinely fair trade within and between countries.
There was one issue that came up in the course of submissions to this bill, which now seem a very long time ago. With the benefit of 20/20 hindsight it is apparent perhaps that to include the telecoms regulators within this bill would have been a good thing. The Commerce Commission itself made a fairly robust submission encouraging the inclusion of telecoms regulators. It was deemed—I am sure correctly by the select committee—that to expand the scope of the bill to include those regulators was not possible or appropriate. That is a reasonable decision, but I just flag that as work perhaps for another time.
The Commerce Committee has come back with recommendations that the bill be amended to allow regulator to regulator as well as Government to Government arrangements and cooperation arrangements, subject to ministerial approval. That would seem to be a sensible approach. The examples given were the difficulty of having otherwise to establish relationships not only with the Australian Federal Government but the state Governments, as well. It has the added advantage of ensuring that the regulators can speak to one another independently of Government engagement or involvement, when that might be appropriate, and we think it may well be. I think the select committee’s willingness to support and, indeed, recommend the regulator to regulator relationships be inbuilt assumes a level of comfort around the independence of
the organisations with which our Commerce Commission could engage, both their independence and indeed their trustworthiness, and their reliability. I believe that is appropriate. But I also think that given that these relationships will to some extent be built on a degree of trust, it is incumbent on our regulators, and indeed on our Government, to lightly monitor the evolution and development of those organisations with which we do develop regulator relationships, as opposed to Government ones, just to ensure that the level of trust that is implied in this recommendation is sustained over time. That is not a suggestion—I am not implying—that there is any immediate harm or likelihood of a reason to lose that trust, but I do think it is incumbent on us and our regulators to maintain some alertness to that possibility.
For the Greens, our only initial concern about this bill in its original draft was the implication that some organisations, some entities, could be exempted from the necessity of paying fees. So we looked into that, and the conversation went through the committee, clearly, and it became apparent that the target for that, the intended recipients of that goodwill—the exemption of the fees—was the small to medium sized enterprise sector. With that reassurance we are entirely happy to support that. I think it is fair to say that we know that the small to medium sized enterprises are a major contributor to our economy. Something like 40 percent of the value-added economic activity in our economy is through the small to medium sized enterprises. They are arguably an inadequately acknowledged and respected sector and part of our economy, and I think it is good that they are being given this consideration in the bill to remove them from the liability of fees that are scaled more appropriately for large corporate entities, which can carry that cost structure and that cost burden.
I think that is as much as I need to say on this bill. It has been fairly well covered by other speakers. We do support it. We think it is good legislation and we are pleased to see it progress through this House. Kia ora koutou.
Hon Dr NICK SMITH (National—Nelson)
: I want to, firstly, commend Craig Foss, the Minister in charge of this bill, the Commerce Commission (International Co-operation, and Fees) Bill, and the Commerce Committee for the good job that they have done with this legislation, which is part of the Government’s broader agenda of providing the right sort of framework for New Zealand to be internationally competitive, to grow, and to create jobs.
One of the most complex areas of law is around this issue of anti-trust legislation that goes back more than 100 years. And it is particularly critical for very small countries like New Zealand where a large amount of commerce occurs within an international context, and particularly, for New Zealand, with Australia. So where you get a very consistent picture from members of the Government is that we see ourselves as an international trading nation that is open to New Zealand picking up the opportunities from globalisation but also wanting to have very clear rules about making sure that that occurs fairly and in a competitive way, and this bill is part of that agenda.
Where I do find it a bit contradictory is that there are members of this House who are sort of confused about when they support internationalisation and when they do not. What you get from this Government is a consistent approach of supporting the growth of businesses and supporting clear international rules. In my view, this bill, in allowing greater cooperation between New Zealand’s Commerce Commission and the Australian Competition and Consumer Commission, is actually about providing the right sort of framework for all business to be able to grow competitively, create jobs, and ensure that this economy is able to match up internationally. So it is very good, in my view, that the House broadly supports this legislation, and we should get on and progress it through the House.
ANDREW WILLIAMS (NZ First)
: I rise to support this bill on behalf of New Zealand First. It is good to see at the end of a parliamentary week and a parliamentary sitting day unanimity across the House on a matter such as this, particularly affecting our commerce, our competitiveness, and our openness in terms of our trading economy with our sister country across the Ditch in Australia.
We have always said, as New Zealand First, that we will support good policy but we will oppose bad policy. In this case, this is good policy. It was policy that was introduced by the former Labour Government; it was introduced in 2008. It is somewhat disappointing that it has taken the best part of 4 years to get to this point and one would wonder why a good policy like this does take 4 years to get through the processes, particularly when Australia had already introduced such legislation and was basically waiting for us to catch up. As is the case, once again Australia shows us up and it would be good if New Zealand could perhaps pick up its act and work a bit closer with our Australian partners in areas such as this in a swifter nature.
The primary objective of this Commerce Commission (International Co-operation, and Fees) Bill is to facilitate that cooperation between the Commerce Commission in New Zealand and its overseas counterparts, but most notably the Australian Competition and Consumer Commission. The bill proposes improving cooperation by enabling the commission to exercise its statutory information-gathering powers to assist an overseas competition authority, and also to provide any information acquired under its powers to an overseas competition authority.
These new powers will also be included in each of the Commerce Act, the Fair Trading Act, and the Credit Contracts and Consumer Finance Act, and reciprocity is the main justification for this bill: any assistance provided by our New Zealand Commerce Commission to an overseas regulator should be reciprocated. This is achieved by requiring formal cooperation arrangements to be in place before the commission can offer any investigative assistance or information. That is a good thing. It means that it has to work both ways. It has to work in the interests of New Zealand but also of the partner country.
There are safeguards, and it is good to see that New Zealand firms have already complained about the sluggishness of the Commerce Commission in reaching decisions on mergers and other such investigations, and so this is a good thing for our New Zealand companies. For them, a diversion of the commission’s limited resources away from its core function would be unwelcome. The bill provides some safeguards in this regard. The bill also provides for the commission to seek payment from an overseas regulator for any costs it incurs in assisting, so in that sense it is a user-pays bill, and those overseas authorities that may require assistance from our Commerce Commission can be charged for its services.
The proposed powers—the bill seeks to better equip regulators both here and overseas to detect and deter anti-competitive behaviour—again, can be only good for consumers, and can be only good for the people of New Zealand to ensure that there is no anti-competitive behaviour taking place within New Zealand. The bill overcomes international difficulties by providing an alternative and, some would say, back-door route for obtaining international legislative documents. Again, that can only help in terms of our commercial competitiveness.
Where information is to be provided to an overseas regulator, the commission must advise any person to whom it relates about that, unless disclosure compromises the overseas regulators or the commission’s investigation. So this is not smoke-and-mirrors sort of stuff; this is above board. It does mean that the commission will be required to disclose to any corporates or companies that there is an investigation under way. The only time this will not happen is if it will compromise or prejudice that investigation.
That would perhaps refer to any unlawful activities that may be taking place, and in that regard that is a route for the commission to work in a more confidential manner.
There are existing agreements already in place with the likes of Australia, Canada, the United Kingdom, and Taiwan. However, these provide for cooperation on certain matters, but do not provide for that reciprocal arrangement. This bill does provide for that with those existing countries where we do have an understanding. The bill is an acknowledgment, however, that without compulsorily acquiring information that is able to be shared, mutual cooperation is somewhat limited. These existing arrangements are likely to be amended to incorporate the new proposed powers.
New Zealand First supports this bill. We are pleased that all parties are supporting it. We are concerned that it has taken this long. We do support the fact that the trans-Tasman relationship, the CER relationship, is a very, very important one. This will help to facilitate business between Australia and New Zealand. It will help the two commissions on both sides of the Tasman to do their jobs more effectively. It will ensure that there is a more competitive, level playing field and it will limit any anti-competitive activities that might be happening in any jurisdiction where we have agreements signed under this bill. So it will support New Zealand. At the same time, it can only support commerce. It can only help our companies be more competitive on the global stage, and therefore New Zealand First certainly supports this and we commend this bill to the House.
KANWALJIT SINGH BAKSHI (National)
: I take this opportunity to speak on the second reading of the Commerce Commission (International Co-operation, and Fees) Bill. This bill, like the others presented by this National-led Government, reaffirms our commitment to increase the New Zealand economy’s performance, which will lead to job creation and to higher incomes, and thereby to better living standards. It is part of our four priorities outlined by our leader, the Rt Hon John Key, for this term. This bill leads to an increase in our economic performance, because its main aim is to facilitate and increase cooperation between the New Zealand Commerce Commission and its counterparts in other parts of the world, particularly the Australian Competition and Consumer Commission and other relevant regulators in Australia. I sincerely feel that the bill will serve as a big help for our exporters. I commend this bill to the House.
Hon DAVID CUNLIFFE (Labour—New Lynn)
: Thank you very much for the opportunity to contribute to the Commerce Commission (International Co-operation, and Fees) Bill. In doing so, can I acknowledge the Commerce Committee and its chair, Jonathan Young, who is with us in the House, and acknowledge the work that he is doing as chairman of that committee through a very busy programme. I acknowledge that contribution.
I would also like to acknowledge the contribution of the member who has just resumed his seat, Kanwaljit Singh Bakshi. I would, however, like to observe that there was a very important debate on the previous bill in relation to migration, and I noted that he did not take a call. I could not possibly comment on whether he was in the House or not, but it was only half an hour ago. It was unusual that we did not hear from him on that, as the Government is taking Draconian measures to abrogate proper process in respect of asylum seekers. I am disappointed for him and his community that as he was sent to Wellington to convey a message, he seems to have forgotten what the message was.
I go back to the Commerce Commission (International Co-operation, and Fees) Bill. Labour is supporting the bill. It was a bill originally introduced by the Hon Lianne Dalziel. It was adopted by the Hon Simon Power and is now in the hands of the Hon Craig Foss. It was reported back from the select committee in November 2010. It has, unfortunately, been languishing on the Order Paper.
So what does the bill do? Well, this is, firstly, part of the work programme on a memorandum of understanding between Australia and New Zealand on business law coordination. It is a part of the single economic market programme, which is designed to harmonise business law between New Zealand and Australia. It is important, before we dive down into the substantive provisions of the bill, that we set the context for it. The first point is that of all foreign direct investment into New Zealand, about 80 percent—$4 in every $5—is sourced from Australian investors and parent companies, including 95 percent of our banking system, a fair bit of our agricultural service companies, and the parent ownership of a large part of our manufacturing sector. Implicit in this debate is that New Zealand needs to find the best legal framework to get the best it can out of its relationship with Australia.
Labour has been broadly supportive across the previous Government, and still is, of the broad outline of the SEM—the single economic market process—but with some important provisos. The first point we note is that the Government has changed the objective for New Zealand from doing what is in New Zealand’s national interests, which one would have thought was its day job, to doing what is in the joint interests of Australia and New Zealand. The trouble with that is that when you try to work out or calculate what is in the joint interests of the two countries, New Zealand’s interests tend to get a bit swamped by the big fella over the Ditch. Therefore, the potential is heightened for New Zealand’s interests to be subsumed. So it is with that cautionary note that we acknowledge the role of the single economic market in this bill and encourage the Government always to focus on New Zealand’s national interest and on the quality, not the quantity, of the investment flows. I see that Dr Huo is here, and I would like to just acknowledge that our investment law is, and should be, non-country specific and should not differentiate between source countries. We ought to have a set of rules that are applied without prejudice and that serve our national interests.
Let me turn to some of the substantive provisions. This bill is designed to allow regulators on both sides of the Tasman, and more broadly, to ensure that they can swap information and swap best practice. They need to do that, because multinational business—often the poachers, in the language of the regulators—do not respect borders because they are multinational. So the gamekeepers need to be able to catch up with them across the borders, too. That means they need a memorandum of understanding for cooperation and for protecting information that has legal consequences when they are involved in joint operations.
There are some important examples—which we support—that have been given by the Government around cross-border cooperation in the telecommunications aspect and, in particular, on mobile termination rates between the New Zealand Commerce Commission and the Australian competition authorities. In doing so can I say that we think that is a very good thing. The powers that our Commerce Commission is using are powers that were conferred by the previous Government following a stocktake review in 2006. They have led to a more robust and rigorous regulatory framework for the sector that has, interestingly enough, led to a rough doubling of investment, a drop in the price of broadband, and a massive lift in the uptake. Likewise, there has been a drop in the price of mobile phones and a lift in uptake, and this is another part of that.
Can I acknowledge in doing so the work of the regulator, the ACCC—the Australian Competition and Consumer Commission—which is of a high quality, and also acknowledge the work of Dr Ross Patterson, the Telecommunications Commissioner in New Zealand. He has held that job for some time. He was the commissioner in the mid-2000s, when I was the Minister, and he has always done an extremely professional job. I wish to acknowledge that he has been a senior practitioner on both sides of the Tasman. He knows the markets on both sides and the practices of the Australian
Competition and Consumer Commission, so, no doubt, under his leadership the Commerce Commission will make extremely good use of the provisions in this bill.
All has not always been good in the area of telecommunications regulation. It was a sad day when the current Government decided to sell the law down with a 10-year regulatory holiday in order to facilitate the structural separation of Telecom. No problem with structural separation—that is a good thing—but selling the law with a 10-year holiday is not, and I am pleased to say that pressure brought to bear by the industry and the Labour Opposition forced it to think better of that idea. We have a slightly watered-down law, but it is not as bad as it could have been. But it does show that that Minister, Mr Joyce, has a habit of cutting deals—like his boss, Mr Key—that threaten our legal framework.
The same Minister, Mr Joyce, was responsible for a deferral of the spectrum licence fees totalling about $45 million to the company that he used to personally own, and I wonder what provisions were in place under the
to avoid any possible perception of conflict of interest. I assume that he has used some—[Interruption] No, I assume that he has used some, but it is not a good look, none the less. Not a good look. The same Minister has been involved in yet another deal with Skycity, to build a casino convention centre with another 500-odd pokie machines and a very important but little-known provision that is called ticket-to-ticket betting. I want to put that name up in lights: ticket-to-ticket betting.
Mr DEPUTY SPEAKER: I remind the member that we are on the second reading of the Commerce Commission (International Co-operation, and Fees) Bill, and the member is departing from that.
Hon DAVID CUNLIFFE: Only very, very briefly, under your guidance.
Mr DEPUTY SPEAKER: No, not at all—not any more.
Hon DAVID CUNLIFFE: Not any more, because I was about to mention that, in line with the terms of this legislation, the South Australian Government and its regulator, when confronted with exactly the same proposal from the same company, said: “They must be dreaming.”—they must be dreaming. No new pokies for them in Adelaide, and no ticket-to-ticket betting—
Mr DEPUTY SPEAKER: Order!
Hon DAVID CUNLIFFE: —which is illegal under the Australian authorities, but which Skycity, I understand, is seeking to make legal in New Zealand, and apparently that is worth more to it than the additional pokie machines. So I just want to have that on the record as we look at trans-Tasman regulation.
The Australian Competition and Consumer Commission, however, has historically been more robust than our Commerce Commission. It did not fall into the hole that was known as “Ruthanasia”, or neo-liberalism, here in New Zealand. It never went as light-handed. It never had a wasted decade. It managed to have reform that was more balanced than what occurred here under the National Government previous to this one and, therefore, there has been less need to wind back that ill-fated experiment than there has been in New Zealand. So we are pleased that New Zealand, having fought its way back to the international mainstream, is now able to cooperate with our Australian cousins where it is in our interests to do so.
Andrew Little: A tenuous grip.
Hon DAVID CUNLIFFE: It is a tenuous grip under the current Government, as my colleague Mr Little has said. You have always got to wonder with the current Government whether it is really New Zealand’s interest as a whole that it is seeking to serve, or whether it is some corporate in the big end of town that might have had dinner with the Prime Minister in the last month or so.
MARK MITCHELL (National—Rodney)
: I am very pleased to take a call on the Commerce Commission (International Co-operation, and Fees) Bill. I have enjoyed listening to the debate in the House today. I am pleased to see that my colleague David Cunliffe is supporting this bill. I do not think there is anything more I can really add at this time, so I am very pleased to stand in support of it.
RAYMOND HUO (Labour)
: I rise to take a call—
Mr DEPUTY SPEAKER: Order! Is this a split call?
RAYMOND HUO: Yes, it is. [Interruption]
Mr DEPUTY SPEAKER: Order! The member should indicate. Is this a split call with the Greens? [Interruption] No, it is not. Thank you.
RAYMOND HUO: It is on my own.
Mr DEPUTY SPEAKER: Proceed.
RAYMOND HUO: Thank you, Mr Deputy Speaker. I rise to take a call on the second reading of the Commerce Commission (International Co-operation, and Fees) Bill. I have in front of me the
Hansard copy of my speech on the first reading of this bill, which was delivered on 25 May 2010. I gave my detailed explanation of why this is a very important bill and why Labour supported this bill. I congratulated the Hon Lianne Dalziel, who initially introduced this bill, and the Hon Simon Power, who subsequently adopted this bill. I wish Mr Power good luck in his new interests and new commitments. I congratulate the Hon Craig Foss, who is the Minister now responsible for this bill.
The bill has been held up. The Government was quoted in the media as saying that it had been held up because of the Government’s workload. That may be the case, but if we look at the way the House progressed a number of bills that have been passed into law, we are satisfied that certainly this Government has its priorities wrong. For instance, last night it passed into law the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill, despite the fact that it creates inconsistency and challenges legal precedent. Labour is opposed to that bill simply because we cannot support inconsistencies in law. The Building Amendment Bill (No 3) was delayed initially and then rushed through because unless it was passed into law, a number of good initiatives, including New Zealand’s long DIY tradition, would not be able to continue in its current form. Overall, that bill was passed into law initially in a “wait, wait” fashion and subsequently in a “hurry, hurry” fashion. That is not a good way to demonstrate competency in the way this House should be run.
Coming back to this bill, the main purpose of the bill is to facilitate increased cooperation between our Commerce Commission and other overseas competition and consumer regulators, particularly the Australian Competition and Consumer Commission. The bill aligns us with Australia, which passed similar legislation in 2007. I note that the Commerce Commission in its submission requested that this bill also apply in respect of information gathered under the Telecommunications Act 2001. Telecom and Vodafone opposed the inclusion, which is included in the Australian legislation. I am sure we will look at that closely during the Committee of the whole House stage. I commend this bill to the House. Thank you.