Financial Review Debate — Ministry of Business, Innovation and Employment

Kia ora anō tātou. We are talking about the commerce portfolio, and I want to direct our attention to the need for the Minister of Commerce to show a greater degree of commitment to, interest in, and ownership of introducing a way of improving the conduct of our supermarket sector. I will say nothing about the issues that I am still working on with the Commerce Commission, but I want this Committee and consumers to know that that was not a consequence of Minister Loss—Foss—

💬 Hon Annette King: Gloss.

—Gloss. OK, whatever—Hoss. It was not as a consequence of anything to do with him; it was because suppliers had raised their concerns with him and his officials and, in desperation, they raised their concerns with me.

A solution after the Commerce Commission has completed its process—and I do not want to do anything that impedes that process—is to establish an adjudicator to establish a code of conduct that is enforceable. There are some models that can be emulated. I do not think it is a good idea to bring holus-bolus over to New Zealand what passes in the UK, where there are actually more operational supermarkets, but there is a model also in Australia. I will have more to say in the not too distant future about the conduct of a certain Australian-owned supermarket in New Zealand and its treatment of Lotto, but that is another matter.

I think that the Minister needs to be prepared to work collaboratively with this side of the House, and in particular Clayton Cosgrove, and take a bipartisan approach. Indeed, one of the rare sensible things I have heard from the Green Party that I actually agree with is that it too not only has a very important part to play but also has already done a considerable amount of work on a model that can be relied upon to police the corporate culture, the managerial conduct, and the treatment not only of the employees of these veritable empires but also those people who are seeking to earn a living through the sale of goods and services to the supermarket empire. That adjudicator cannot come into being until there has been a decent review, which I hope will follow after the Commerce Commission exhaustively goes through the process and protects the identity and the investment. I know there are issues of natural justice if serious and egregious cases are referred to them—the supermarket needs to take responsibility—but a review could actually empower people to hold the supermarkets to a higher level of conduct.

The Woolworths-owned supermarket in New Zealand is accountable to no one. It is obvious that the chief executive officer does not know what is going on, and the board of directors is so distant in Australia, across the Tasman, that it has no genuine idea as to what is happening here, other than the fact that the supermarket may have been suffering declining revenues recently. Now the supermarket is panicking and paying inordinate amounts of money for full-page advertisements, but that is a commercial decision. The level of interest it is showing in emblazoning its concerns through an advertising campaign in the daily newspapers also needs to be visited upon the corporate culture and the corporate values that it has engendered in its organisation.

I have indeed been criticised by the Minister for being a bit polemical, but I am not the architect of the corporate culture that has fed the concerns that now resonate throughout the public and occupy the attention of the Commerce Commission. It is a central commerce policy issue. There is an opportunity for that Minister to be bipartisan and work with our side of the House, in particular Clayton Cosgrove. He has got experience in these matters. After all, he brought forward a solution to the egregious conduct that blighted the real estate industry. So this is a rare opportunity for this Minister, whose work ethic could do with a tremendous degree of growth and improvement, to work with our side of the House.

Kia ora, Mr Chair. Ngā mihi nui ki a koutou. Kia ora. I rise to take a call on the financial review of the Ministry of Business, Innovation and Employment. One department within the Ministry of Business, Innovation and Employment is energy. What we know when we look at what the Government is doing in the energy space is, actually, that there is going to be more business, more innovation, and more employment when you look at this side of the House and what its plans and visions are for energy. Kiwis have a real energy choice this election. On the one hand, on the blue side, you see a party that is offering New Zealanders more excuses for rising power prices, a party that is going to be going to the election with a track record of power increases of $360 on average, a party that has seen power prices go up 3 percent despite demand going down 2.5 percent.

💬 David Bennett: Tell us about your carbon tax. How much would carbon tax go up by?

Mr Bennett, New Zealanders know all about that sinking feeling they get when they go to the letterbox to get a power bill from a big electricity company under National. What we have seen under the failed National electricity reforms is that power prices have increased 67 percent above inflation since those Bradford reforms. National is telling New Zealanders their power prices are not too high. In fact, they are going to keep going up even when demand is going down. National is a party that talks about renewables but, in fact, has seen fewer renewables in New Zealand than we had in 1980 or in 1990. National is a party that goes around the country opening gas-fired power stations and sees Huntly extended for another 25 years. So when that party criticises NZ Power as seeing more thermal generation, it is very hollow indeed.

National is a party that is about higher electricity prices for Kiwis and less clean energy for Kiwis, but also New Zealanders’ assets being flogged off. New Zealanders know all about the Government’s fiscally reckless, short-sighted asset sale agenda. We are losing control of assets, built up over generations of New Zealanders, for a tiny amount of money that, in fact, has cost Kiwis, the taxpayers, hundreds of millions of dollars.

The fourth part of the jigsaw of so-called energy business, innovation, and employment is deep-sea drilling. Here we have got a sector that risks hundreds of thousands of jobs in the rest of the wider economy, a sector that risks a $40 billion cost, as we saw in the Gulf of Mexico from the very same company that the Government has invited down to New Zealand—a $40 billion cost. It is an industry that has got the lowest job-producing potential of all. So this election, while National is talking about excuses for rising prices, assets being flogged off, risky deep-sea drilling, and less clean energy, the Greens are going to be talking about cleaner, cheaper, smarter power.

The Greens have got a plan, NZ Power, to deliver $300 a year on average in savings for Kiwi households. With 42,000 Kiwis disconnected in the last year—four times more than 5 years ago—it is high time a Government acted to put the interests of New Zealanders and their power bills before the profits of the big electricity companies. We have got a plan for 100 percent renewable power. New Zealand can lead the world in taking action on climate change.

This election we are going to the public saying that although that side of the House sees excuses, the Green Party will put insulation under their roofs and will put solar panels on top. What we know is there is more innovation in terms of the smart grid, and smart devices on the demand side, powered through NZ Power. We know there are 5,000 jobs, according to Business and Economic Research Ltd, available in NZ Power, and 1,000 extra jobs when it comes to installing 30,000 solar panels on Kiwis’ roofs. So when the choice is between a rise in power prices, assets flogged off, and more risky deep-sea drilling; and, on the other hand, insulation under your roof and solar panels on the top—cleaner, cheaper, and smarter power—I know what New Zealanders prefer. This is where the economic benefits for New Zealand are going to come from.

Investment New Zealand says we will have a $150 billion export opportunity in clean energy and greentech by 2030. We have got a $6 trillion global market we could be accessing, according to Pure Advantage. PricewaterhouseCoopers, hardly the Greenpeace of the business world, says there is a $22 billion clean-energy economic opportunity. Just this week we have seen Bloomberg report record solar installations around the world. This is growing faster than the oil industry.

It is a privilege to make a comment on the report on the Ministry of Business, Innovation and Employment and to talk about productivity, which is an issue that the ministry ought to be concerned about and have at the front and centre of its role. It is interesting that in the days past we have been debating publicly and in this House the issue of KiwiRail and the fact that it has locomotives—recently purchased locomotives—that were made using asbestos. That, in many respects, typifies the very problem that the New Zealand economy has and that this Government promotes and perpetuates, time and again, and that is moving down the path of cheap and nasty. Every opportunity that this Government has to do something, to invest in New Zealand businesses, to encourage investment by New Zealand businesses in their future and in workers, what does it do? It plumps for cheap and nasty. It did it with the locomotives purchased by KiwiRail.

If anybody is under any illusion, let us just understand the risk with asbestos. It takes only one microscopic fibre to lodge itself in the lungs of a worker for that worker to be condemned for life. When they get ill and they succumb to that single asbestos fibre, that is it. They have a life of misery until they die. That is why civilised countries around the world ban the use of asbestos—Australia has done it for many years—and it is why it should be the subject of considerable public outrage that we even allow it. The question, of course, to KiwiRail is where was its procurement manager? Sitting in China with the manufacturer, providing day-to-day supervision to make sure that the goods we do not want here were not used in the fabrication of those locomotives? What was their approach? Or did we just sort of sign the order and wait until they came across the wharves and have them here, causing their problems?

The other issue about productivity is this. It is a labour market issue. It is an employment relations issue. If there is one area where this Government is taking us down the track of cheaper and nastier and worse and less effective, it is in the area of employment relations and employment relations law, and our labour market regulation. This Government has on its agenda, and is not afraid to introduce it this side of Christmas and before the election, a set of laws that will once again deteriorate the rights of workers and hand even more power to employers to do what they like. It will once again dismantle the checks and balances in the employment relationship that we have become used to.

Here is the problem we have. We have a dumb enough labour market policy at the moment, and this Government wants to make it dumber. We have gone from dumb to dumber. Our problem is we suffer low productivity in this country. I can tell the Committee this. It is not an issue about the quality of our workforce. We have an outstanding workforce in this country. It is not the workforce; it is the management, as attested to by the Productivity Commission in its report that it released around about 23 December last year. It tried to explain and account for the difference in productivity between New Zealand and Australia. The commission found that two-thirds of that productivity difference is not workers, it is not the capital investment, and it is not the technology we use. It is the quality of our management. Every time this Government passes a law like the hated 90-day rule, like abolishing workers’ rights when it comes to collective bargaining, it hands a licence to our poor-quality management to act in even worse ways and to reduce our productivity even further.

We need a Ministry of Business, Innovation and Employment that is on top of those issues and is giving policy to Government, giving policy to Ministers, that is about lifting our performance in the workplace and when it comes to productivity. We know the equation when it comes to productivity: if we want to pay better wages, move ourselves up the value chain, we have to lift productivity. But everything this Government is doing—everything that it is doing—is suppressing the ability and the potential for this country to improve its productivity performance. It is a disgrace.

Report noted.

Ministry of Justice