Commerce Amendment Bill

So we start with the interrupted debate on the Commerce Amendment Bill. When we were last considering this bill, Part 1 was being debated and the Minister, Dr David Clark, had the call. He may resume his contribution if we wishes. The question is that Part 1 stand part.

Thank you very much, Madam Chair. No doubt the Minister will be pleased to engage in discussion on this, as is the spirit of committee stage, and we look forward to that. And no doubt colleagues of mine on this side of the House, who quite probably know more about the bill than I do, will look forward to engaging with him likewise.

I was curious to know, first of all, looking at the commentary that has been provided by the Economic Development, Science and Innovation Committee, the Minister’s view of a number of the recommendations that have been made, one of them being the new maximum penalty to be created under new section 83, set out in clause 28. I wonder if the Minister can explain his response to the recommendation that the select committee made around the timing of which that penalty would come into play. For those who haven’t followed the bill closely before or perhaps are even very new to it, a position which I have some sympathy with, being pretty new to it myself, they may not be aware that section 83 contains a penalty for anti-competitive acquisitions and mergers. So, obviously, the name of the game is to allow competition. We have a fundamental view—I think, when I say we, it’s probably shared across the House, and I know that the relatively orthodox position of the Labour Party in this would presumably support the idea—that more competition is good. Indeed, I should acknowledge there’s been a review into supermarkets’ pricing and competition and so on.

So, obviously, it can be understood that, while the parties do sometimes have a different view about the way that competition should be encouraged and how interventionist the Government might be in relation to creating that, or allowing that competition, nevertheless we do share that basic view in this, essentially, market-led democracy and economy whereby we want to encourage competition. So the penalty for anti-competitive behaviour is no small thing, and the suggestion of the select committee, members might recall, was that the penalty shouldn’t be delayed from coming into force some 12 months after the bill came into effect, or after the Royal assent, because they point out that, with such a long lead time as a year, it would mean that it wouldn’t have its effect. And believing it to have a useful effect, of course, is the whole purpose of it being in there in the first place. So the recommendation from the select committee was that only one month, rather than 12, be the period of time before that would come into force. And, as I say, through you, Madam Chair, I would be grateful for the Minister’s response to that and how he thought that maybe the original time frame was justified or perhaps that he thought it would be appropriate to reduce that time frame, as the select committee has recommended.

Oh, good—I was hoping Minister Clark was going to get to his feet, but, obviously, the Minister’s saving himself for things to come up.

I wanted to talk to Supplementary Order Paper (SOP) 93 in the name of the Hon Todd McClay. This relates to clause 14, which is in Part 1. In it, he proposes a new section 36 after subsection (2), which states “(3) Nothing in this section applies to any conduct carried out by a person where that person can demonstrate … (a) it engaged in the conduct for the dominant purpose of protecting a legitimate business interest; and (b) the conduct was reasonably necessary to protect that legitimate business interest.” There is a further addition to this, in clause 14, new section 36A, after subsection (5), which is: “Nothing in this section applies to any conduct carried out by a person where that person can demonstrate that: (a) it engaged in the conduct for the dominant purpose of protecting legitimate business interest; and (b) the conduct was reasonably necessary to protect that legitimate business interest.” So there were two definitions: “reasonably necessary” and for the conduct.

So this clause, as Madam Chair will be aware, relates to intellectual property (IP). Now, intellectual property is a crucial part of any commercial activity. In fact, one of the interesting things, if you look at the Government’s balance sheet, is intellectual property is only worth $3 billion. In my view, it’s highly understated. But, for most companies, people are the most important thing, but the next most important thing is intellectual property. In some instances, companies will want to protect that and they’ll go through a patent application process. They might go to the next stage down, which is a licensing arrangement, or they may choose, because the difficulty in around—protecting the commercial IP is very, very difficult.

What this bill does is that it is going to do away with the right for businesses to protect their IP, and it’s a reference to what’s called intellectual safe havens. It’s interesting, under this bill—I’m just trying to find supporting [Looks through papers]—I had a number of people write, saying they did not believe that under the current proposal in this bill the intellectual property safe harbours should be done away with. My question, really, to the Minister is: what is the commercial justification for this?

Because even where companies have a significant market share, none the less they will want to create intellectual property and they will want at times to share that property. The trouble with dealing away with the safe harbour rules is that it becomes difficult. In our view—and I think this is what the Hon Todd McClay’s SOP is about, is making sure that we do not disincentivise people to, first of all, create IP, but, secondly, to adequately use it and share it. The big issue is that companies do want to share their IP, but the removal of the protections under the safe harbour provisions, in this bill, will mean that businesses think twice before doing it. I just would suggest to you, Madam Chair—and I’m hoping the Minister’s going to respond, because, first of all, I’d like him to explain what are the safe harbour IP protections that we’re talking about, and then, secondly, why he’s chosen to remove them in this bill. Because, as I say, I think there are a number of reasons, but let’s hear what the Minister’s going to say, and then we can move on from there.

Thank you very much, Madam Chair. I’m just taking that mask off which takes a wee bit of time and I appreciate the Minister—I’m looking forward to his contribution to a number of very good questions that have been raised by my colleague Andrew Bayly.

I want to move to clause 32 of Part 1 of the bill, and this is in regards to two new sections that have been implemented or introduced: sections 99AA and 99AB. I refer to the supplementary department disclosure statement under “Privacy issues”, section 2, in which it notes these two new amendments in terms of Part 1 and their impact by adding in the New Zealand Police to an organisation that the Commerce Commission is allowed to share information with. What I’d like from the Minister is to provide a little bit of context and information in terms of how he foresees that engagement with the New Zealand Police and what types of information he believes will be shared through this arrangement. I’m interested particularly around the safeguards around the provision of that information and also, I guess, consideration around unintended consequences and implication in terms of other criminal matters and civil matters as well. So a little bit of clarity and context in regards to clause 32 of the bill by the Minister would be appreciated.

Thank you, Madam Chair. I’ll deal with the three issues that have been raised so far. First, to acknowledge Chris Penk’s question: indeed, the committee itself recommended one month. That has been adopted, and I thank the committee for its work on that.

In respect of the question from Andrew Bayly, I did cover that in some detail in my introductory comments, but I’m happy to repeat for the member. Basically, the argument that intellectual property rights shouldn’t be subject to scrutiny in a competitive context is an outdated idea, and so we’re essentially repealing that. That is what’s happening. Now, robust intellectual property rights incentivise innovation, as the member well knows, and really, arguably, they’re complementary, rather than—yeah, well, they are complementary to competition law. So we’re removing the safe harbour provisions and making them susceptible to the same scrutiny that we would expect of any other similar thing—

💬 Andrew Bayly: But why—but why?

—because it is outdated thinking that needed to be updated and changed.

In respect of Simon Watts’ point—which was the third one—around the New Zealand Police, there was an error noted after the bill was reported back from select committee. The bill inserts new sections 99AA and 99AB into the Act, as he’s noted, which should provide a legislative basis for the Commerce Commission to exchange information with other regulators and Government agencies when necessary for the performance of statutory functions, and, basically, because the Police are a different kind of organisation, they fell between the cracks here. They’re neither a Public Service agency nor a statutory entity, but, instead, are an instrument of the Crown, and this corrects for that error, which was overseen in the bill at the committee stage.

Well, thank you. I’m glad the Minister’s taken his first contribution. With all due respect to the Minister, I don’t think just saying “It’s outdated thinking. That’s why we’re going to remove it.”—that doesn’t really explain why the Government is so keen to do it. And just to add a little bit more colour to what I’m talking about, I thought it might be useful to just quote from a letter that I received from Australia New Zealand Screen Association, Writers Guild, Screen Production and Development Association, Interactive Games and Entertainment Association.

So to put this in context, the games industry in New Zealand, from memory, is worth about $300 million and growing rapidly. Of course, the Minister is also in charge of technology, and I know he loves talking about these things in his other capacity. So now we’re talking about intellectual property, which cuts to the heart of one of his other portfolios, and yet he just says, “It’s outdated thinking and let’s move on.” Well, I’m not so sure about this. As this letter says, “We thoroughly agree with National’s concern that repealing the intellectual property exemptions in the Commerce Act was chilling investment in New Zealand. Given international film studios and investors scan the globe for potential investment and licensing opportunities, this is likely to discourage overseas film studios, discourage international investment in the New Zealand film industry, discourage local film makers and writers.”

Then this letter goes on to say it may discourage international video game companies from licensing their intellectual property to New Zealand, video game distributors and developers, and it may also discourage them from publishing New Zealand made games. So next time I hear the Minister standing in his other capacity, talking about the gaming industry and how it’s a vibrant industry and that technology is going to drive the economy forward, can he please, before he does that—tonight, please—explain to anyone listening and certainly to the Madam Chair why it is necessary to get rid of these provisions when the industry, many parts of the industry, are against it.

The member is obviously energised about this particular aspect of the bill. I will repeat for him—he has commented that I made only short comments. It’s because I’ve said these things before and I had taken it that the member had engaged with the early material, but I’m happy to repeat for the member my comments and for the record, because I think if that is a thing that’s energising the member, let’s put it on the record.

So this is about the safe harbour provisions for some intellectual property arrangements. Now, the bill would remove the three provisions that prevent scrutiny of certain conduct when it involves intellectual property. The provisions are out of date, as the member has challenged—that on its own is not a sufficient ground. That’s shorthand for the reasons that I will give now. They reflect a legacy of discredited thinking, and if you want to put them in the vernacular, basically they cause confusion and ultimately they prevent scrutiny of conduct, which raises genuine competition concerns.

So I do want to make it totally clear. I recognise the importance of providing business with the confidence to invest in the development of intellectual property and actively make it available to markets. So I just want to make that clear to the member. Robust intellectual property rights incentivise innovation, making them complementary, I would argue, to competition law. Therefore, it’s redundant to have carve-outs for intellectual property. Most intellectual property arrangements are helpful to the competitive process, but it does not mean that they should be immune to scrutiny under competition law. The safe harbours make a universal assumption as they stand now that certain practices will never be anti-competitive just because they relate to intellectual property. So that’s where the current law stands. And it’s a very bold assumption and one that undermines the integrity of our competition law—again, other members believe that without safe harbours the Act will over-penalise and over-deter certain conduct. We can see from the departmental report that officials have made a careful study and that that study challenges any such view. I would argue intellectual property arrangements should be subject to the same scrutiny as any other type of property arrangements. At the very least, I suggest we can be confident this policy will produce far fewer errors than the universal assumption that some conduct is never anti-competitive simply because it involves intellectual property.

So again, I want to stress the importance of the guidelines that the Commerce Commission will update to support intellectual property owners to realistically assess their obligations. I expect these guidelines to be detailed and provide assurance and clarity for the business community as indeed similar guidelines in Australia have done for the community there, and I know from speaking to people that they’ve taken comfort in their particular approach.

I do want to thank submitters who’ve written to me for pointing out the benefit of those guidelines in Australia, because they have come down and taken the concern away from those that initially had it. Now, the member, I’m sure, is going to again repeat arguments in this area. I just want to let the committee know, because I’ve addressed these quite thoroughly a couple of times, that if he raises the same issues again, I’m not going to leap to my feet every time. If there are other areas of the bill he wants to scrutinise, of course, I’m very open to that.

Thank you. Intellectual property (IP) and competition law have historically been uneasy bedfellows. IP looks to reward creativity and innovation and commercialisation and leads to productivity uplift. There’s no doubt about that and there’s enough studies to prove that. Competition law within markets ensures prohibiting monopolistic behaviours and activities. And the impact is likely to mean that IP owners will need to be more careful when looking to commercialise and enforce their IP. In a way, it could effectively discourage investment. So this issue’s sort of never been totally addressed. It’s sort of been buried because the focus has been on the proposed changes to section 36, which is the competition element. So we believe that the safe harbour should be reinstated to give business confidence in investing in their IP and licensing it as well.

So can the Government give that investment confidence? Can it manage the productivity around competition law and enforce IP rights and IP sanctions when it needs to? It’s a big area of work. So in terms of giving business confidence, I would ask tonight that we create some positive outcomes for New Zealand, both businesses and consumers, and nothing should be in the bill that encourages disinvestment. Thank you.

Yes, well, first of all, I’d just remind the Minister, the Hon Dr David Clark, because he keeps wanting to remind the rest of the Chamber, because just because he may have spoken about this issue some time ago—and I’m not sure when it was actually in the Chamber last time, but some time ago. That’s not necessarily an excuse to just try and fob off people asking legitimate questions.

So my first question is has the Minister actually spoken to the gaming industry about the intellectual property changes that he’s proposed, given his technology portfolio holding that he has? Because I’d love the Minister to stand up and tell me what the gaming industry does say, given the comments I read out in that letter.

The other issue with this is—I take his point that we don’t want people misusing intellectual property. That is the balance of any bill that needs to pass through this Chamber, so we do end up with an outcome that provides sufficient protections, but at the same time doesn’t stifle economic activity. Where we’ve ended up—and by the way that the Minister characterised it before, which is, “Because everyone else has done it.” This is, effectively, an Armageddon-type clause. This has got rid of the safe harbour clauses, and that is quite a significant issue.

So the lack of nuance, the lack of ability to be able to work through different options to make sure that we do protect intellectual property that is derived and created in New Zealand, can be used and can be disseminated and shared, but at the same time still protects the creator of that intellectual property. I suggest to the Minister that where we’ve ended up with is an Armageddon clause, which means that we’re going to remove it. That’s why I support the Hon Todd McClay’s Supplementary Order Paper.

So the first question: has he discussed it with the gaming industry? I’d love to hear whether he has and what the response was. The second thing—part of this discussion was the transitional period for existing intellectual property agreements. There in the bill, it proposes that all this takes place within a year. We also oppose this because it is—at the moment it’s a three-year period, and we suggested that moving it to one year was too short. I’ve got to say that I’ve had companies that have created intellectual property and applied for patents—very expensive. Incredibly expensive, not only in New Zealand but to seek them around the world to make sure they are binding, and every five years to actually make the application or pay the application fee to renew those patent fees—very, very significant costs. Companies that have created and gone down that expense do want to make sure that if they’re going to do that, they would have entered into commercial arrangements.

I think what I’d say to the Minister—and it’s almost commercially naive that it is assumed that companies can change these agreements easily within a year, rather than the existing three-year period that was proposed. We think it’s, again, a more practical, prudent step to help companies who are going to be caught by these provisions to migrate and change their arrangements over time.

The final thing: the Minister talked about how the Commerce Commission intends to release guidance regarding the repeal of the intellectual property safe harbour. I’ve got to say, I scoffed at that when I heard that, because here is the same Minister that issued these Credit Contracts and Consumer Finance Act (CCCFA) regulations, who took the 2017 CCCFA changes, which basically means impose all these regulations on the finance industry—the 2017 regulations were 63 pages long, from memory. Now, talking to 105, and guess where we are. We’re right in the problem, and he’s having to fix up these regulations because we’ve got a dysfunctional market.

I would suggest to you that the reliance on the Commerce Commission to issue this guidance—and he says the industry is comforted by that. Who has said that to him? Please name them, because I would be loving to hear who is supporting that.

I’m enjoying this, this evening. It’s good to hear a little bit of good questioning happening from this side, and looking forward to the Minister responding to that.

Look, I’m just going to get back to a couple of questions that I was referring to before, and I appreciate the Minister’s answer around my question around clause 32 and the additions of the new subparts. I was, and I am, somewhat concerned, I guess not surprisingly, that there was a mistake in the original drafting and, subsequently, there’s had to be an amendment and a fix of that. You know, we acknowledge these things happen, but we do see that quite regularly.

I’m interested in regards to that clause 32, what was the view around that from the Office of the Privacy Commissioner, and whether they had any concerns? I note in the document around the departmental disclosure document that it said they didn’t have any specific concerns. But I am interested around—because of the fact that it was, there was an omission or an oversight. I think the language here is an “unintended oversight”. What sort of review was undertaken there?

The other question I’ve got for the Minister is in regards to clause 28. Clause 28 of the bill would amend section 83 of the Act, in regards to increasing the maximum penalty for anti-competitive acquisitions and mergers. So this is a new maximum penalty that’s being introduced under clause 28. And what I’m interested from the Minister, in terms of providing some context, was how did he get comfort that that new maximum penalty amount, which is $500,000 for individuals, was appropriate in order to get the balance between the penalty regime and achieving the intended behaviour, and how that confidence was gained? The other aspect is around the calculation that’s being provided there for businesses as well, when there’s a two-part calculation which takes into account multipliers of revenue. Again, interested in just a little bit of context around why and how we got to that position.

Linked to that and the third question that I’ve got, if I may, is in the departmental disclosure statement, section one, as we’ll all be aware, refers to offences, penalties, and court jurisdictions, and part 1(a) refers to do the proposed amendments create, amend, or remove offences or penalties, including infringement offences or penalties in civil pecuniary penalties. The answer’s no. So I guess what I’ve just articulated in terms of clause 28, changes to section 83, well they are actually changing the penalties regime. They’re introducing a new maximum penalty. Yet in the disclosure statement, in bold text at the top, the answer is “no”, “no”. Maybe it’s just me, but I really want to get context. I guess there’s been an omission already, in terms of a mistake, but is this something that I’m missing or, you know, I’d appreciate a little bit of information from the Minister so I can be more informed. Thank you.

Thank you, Madam Chair. I do want to just note in respect of one of the issues raised by Simon Watts, the Office of the Privacy Commissioner has made no further comment on inclusion of police in information-sharing provisions.

In respect of the contribution of the member Andrew Bayly, a rather excited contribution, I’m not sure whether he’s had a long and energising dinner or quite what’s brought him to this point of pique. He’s railing against the Commerce Commission, and you know, I do note that the letter that he quoted from around the repeal of intellectual property exemptions does suggest that the end, as a point of resolution, the issuing of guidance in Australia by their commerce commission was the very thing that provided comfort. I don’t know whether the member is confused or whether he hasn’t read the whole letter. This is a point that we have traversed, but it’s certainly got him energised, and I guess that alone is a good thing.

Madam Chair, thank you very much. I am pleased to speak in this debate. As my colleague Andrew Bayly said, I do have a Supplementary Order Paper (SOP) and I would ask the Minister to consider—not to brush over lightly, because this isn’t actually a political point. It’s extremely important that we get it right for those businesses in New Zealand that have used or relied upon this safeguard—that does exist in other countries that we compete against—and that will be taken away without good reason.

I would say that, actually, Andrew Bayly is passionate, not as a result of anything that’s happened in the dinner break but because, actually, it’s important we get this right. And when the Minister says, “Look, I’ve answered before, and so I’m not going to keep jumping to my feet.”, he does a great, great disservice to all of those people whose businesses rely upon the Commerce Act, who follow it closely, have used it legally and properly, and now are going to find extra restraint put upon them or restriction as a result of this problem around intellectual property (IP) that the Minister is trying to fix when actually there is a very strong likelihood that a problem doesn’t exist. Look, it could be that the Hon David Clark is trying to make a name for himself as a problem-solver. But, Minister, that will only happen when you solve problems when they exist—a solution to a problem that doesn’t exist. Actually, it’s just regulation, it’s change, it’s cost, and that costs everyday New Zealand businesses.

Now, I did have a look at the letter just then at the bottom that he was mentioning, that Andrew Bayly spoke of from the gaming industry. He didn’t talk about other parts in it where the gaming industry said this is likely to be the consequence of these changes taking away the IP provision or the safeguard. And he spoke about the New Zealand film industry, the industry that the previous Government—when we were in Government the National Party put significant effort into. The reason that The Lord of the Rings remained here and The Hobbit movies were made here was because of changes we made that did include an investment on the part of all New Zealanders.

Actually, what the gaming industry have done—and I take them at their word on this because they’re experts. Their vested interest is they are already doing this work. They are already creating jobs in New Zealand, income for New Zealanders as a result of this, but they’re saying that international film studios and others are less likely to license or make available their software and other IP as a result of these changes because they look around the world, they look at where they have certainty, and New Zealand may no longer have certainty. The United States retains the legislation with a carve-out, a safeguard, for IP. The UK does; so does the European Union.

The Minister is right when he referred to—at the bottom of the letter they were talking about what happened in Australia. Australia did make these changes. There was a lot of controversy. We heard in committee, actually, that Australia stepped back and now looking at that and they have an assessment period put in place to decide whether it was the right move. So it’s not so much that it actually has worked in Australia and everybody’s happy. Their Government put in a provision that said they would come and reassess it. And that reassessment, I understand, is likely to start soon and is not going as well as has been suggested. We heard that during the committee stage.

Also, these changes will have an impact upon existing arrangements in New Zealand; they’re not just forward looking. And when the authors of the letter from the gaming industry said in Australia, in the end, they needed a lot of guidance from their commerce commission, they actually were making the point in the case of the New Zealand Commerce Commission, any guidance has been very, very high level, which doesn’t give them comfort. What that does is it means that there is ongoing uncertainty.

So I have an SOP in there that would mean that New Zealand lines up with the United States, it lines up with the United Kingdom, it lines up with all of the European Union—three areas where a lot of investment comes towards New Zealand for our film industry, an industry the New Zealand taxpayer has supported when we were in Government and continues to support now under this Government because they continue to provide the support of subsidy of the GST back and many, many other things. You remember all the money that Stuart Nash as the Minister promised for the Hobbit series that Amazon was doing? What did Amazon do? Left because of ongoing uncertainty. Where did they go? To a European Union country. So I would ask that this SOP be considered by the Minister and supported.

Tēnā koe, Madam Chair, and just wanted to get a bit topical, I guess. I’ve been reflecting on one of the submissions in this bill and their concerns around the supermarket industry, and this is the Food and Grocery Council. I wanted to sort of get a reflection from the Minister on how he envisions this bill having an impact into what some people perceive to be anti-competitive behaviour in the supermarket industry.

Thank you. Well, first of all, I’d suggest to Minister: play the game, not the man. I haven’t had dinner. I haven’t had anything to—I think the aspersion was that I was excitable because I might have had something else. I’ve been to the gym actually.

I thought that contribution from Hon Todd McClay was very insightful given he was on the committee when this bill was being put forward, and, as he quite rightly stated, the Supplementary Order Paper proposed by Mr McClay brings the changes back into line with Europe, America, and a number of other jurisdictions—and we heard that Australia’s going through a review. That is why it’s very pertinent right now that the Minister addresses the issues because just to say rather blandly and dismissively that “a lot of other jurisdictions are moving on; it’s old thinking.”, I think the Minister’s actually out of touch, particularly when Australia’s reviewing these provisions.

So I don’t think we’ve actually had a proper view, and I note the Minister’s got some officials there. Maybe I can suggest to him he might seek some advice from them. Now, he did make a rather scathing comment about this letter as if I hadn’t read it. Well, let me just finish what the final paragraph actually says. This is the bit before “Yours sincerely and we welcome the opportunity to meet.” This is actually what it says, Hon Dr David Clark: “Our concerns are particularly acute, given that international investment will be the key to New Zealand’s film industry recovering from the COVID-19 pandemic. Put simply, the Commerce Amendment Bill is looking to make counter-productive legislative changes at the worst possible time.” Now, that’s the end of it. So I wish the Minister actually might have read this letter, because if he had, he might have responded differently, and he still hasn’t answered my question whether in fact he has sat down with the New Zealand gaming industry—particularly in his guise as technology Minister—and actually asked them what they think of this bill. I would really like him to answer this question, particularly as I’ve now asked it three times. The most fascinating thing is who’s signed this letter. I know that before, you know, you’ve got the interactive games, you’ve got screen production, we’ve got the Writers Guild—gee, they’re a really difficult lot, aren’t they?—and the Australia New Zealand Screen Association. They’re all people that, you know, obviously are huge protesters. No they’re not, actually. They’re reasonable, creative people of New Zealand. They’re the type of people that we should be protecting and looking after their interests.

So my second substantive question to the Minister is: given these changes that he’s ramming through in this bill—and of course all Labour’s going to vote for it and probably Greens—what is the commercial assessment of the lost to New Zealand industry of all these different industries, the screen guild, interactive games, the Writers Guild, and the screen association? Have any numbers been calculated—what the financial impact would be? And if he has, by different production, by different areas, where that would be very useful to hear tonight.

Could I just remind all members that after you give your debate, please put your mask back on. Without naming any names, can one of the members of the ACT Party do so. Thank you.

Thank you very much, Madam Chair. I didn’t get a response from the Minister in regards to the points that I raised in regards to clause 28, inserting new section 83(3), in terms of the rationale around how we reach those levels of maximum penalties. The reason why I’m asking that is I want to understand. One of the concerns that National has with this bill is the detrimental outcomes, potentially, that could fall on consumers as a result. Obviously, those clauses impact both individuals but also business. So that’s the first question that I asked before that I still have not got a response.

The second question quite simply is: is there an error in the departmental disclosure statement, clause 1 subsection (a), where it states “no” to the fact that there were no proposed amendments to create, amend, or remove penalties and offences based on clause 28, inserting new section 83(3), which actually changes and amends the penalties? Is there an error in the departmental disclosure statement: yes or no?

No. The supplementary disclosure statement relates to the Government Supplementary Order Paper (SOP) re the technical amendment to the New Zealand Police. The amendment in clause 28 to amend section 83 regarding the penalty was done in committee, not by SOP.

In respect of the member Ricardo Menéndez March and his question, topically, about competition in the grocery sector, what I would say as an overall comment is that it has been very challenging to—well, it has been hard for the Commerce Commission to challenge anti-competitive behaviour, in my view. Since 1986, there have been five cases taken and only two have been successful.

I think this highlights that it has been very, very difficult to take successful cases for anti-competitive conduct, and what we’re doing today in moving this bill through the committee stage—notwithstanding some of the theatre along the way—is that we are bringing our law more into line with what they have in Australia. Whether it’s intentional or not, requiring large, well-resourced businesses to manage their own actions in terms of whether they’re causing harm in the market and harm to competition is entirely appropriate.

Madam Chair, thank you very much. To the Minister, I want to go back to what the soon to be honourable Andrew Bayly said, and that was a direct question to the Minister about that letter that the Minister spoke of that Andrew Bayly read from, and it was a letter that came from the gaming industry. It was also sent to the Minister. Did the Minister read that himself, or did he merely get a briefing for officials on it, or is he not aware of it? I know in previous portfolios before, in the last Parliament, he had to admit that he was speaking to documents he hadn’t fully read. If that’s the case here, it’s acceptable—Ministers get a lot of information; they have officials and others who deal with it—but, actually, did he read that himself and, if not, will he get his officials to get it for him quickly, and consider it before my Supplementary Order Paper comes up for a vote? That’s the first thing.

The second is, he talked about the changes around intention and effect when it comes to market position. I have a particular concern around this. I don’t disagree that, actually, we probably need better rules or clearer rules for the Commerce Commission, because the Minister is right. It’s not that they haven’t won that many cases; they haven’t taken a lot because, of course, if they’re not sure of a prosecution, a conviction, they’re not likely to take a case. The point here, though, Minister, is it’s as much about resource as it is about the law. I’m not arguing there are not changes in the law needed, but it is about resource. His Government has increased the amount of money that has gone to the Commerce Commission, but, actually, it’s gone to the Commerce Commission as a result of an inquiry that his Government directed them to undertake, and they now monitor fuel pricing in New Zealand.

You will remember many, many years ago a very important commerce issue that falls under the jurisdiction of this Act, when the Prime Minister was accused of being the “fleecer-in-chief” because a very large amount of tax that the Government takes from fuel—the large make-up of the component of a litre of fuel that today is over $3 is taxed. They instructed, by way of letter, the Commerce Commission to undertake an inquiry into that. The Commerce Commission’s come forward with its position. The Government said, “Job done; see, bad oil companies”. Well, the price is now higher; the extra money that the Government gave the Commerce Commission largely is to continue to monitor that.

So the point of this is that, actually, yes, there are changes needed to the law but we can’t merely make it easier for the Commerce Commission to take cases and win them in a court, because actually we need certainty on both sides, but it is a resourcing issue. They actually don’t have enough money to do all the things that they need to, and sometimes they don’t take cases because the resource is not there. And, whilst the Government gave them the ability to initiate their own inquiries, they haven’t been able to do so, because every time the Government has a political problem—two years ago, it was petrol prices when Kiwis were being fleeced at the pump because of the amount of tax the Prime Minister Jacinda Ardern collects on the way through. Then it’s the supermarkets, because the price of everything’s going up, and supermarket prices are going up, and a very large part of this is because the Government keeps putting in place rules, regulations, and cost increases that flow through to the cost of our food and supermarkets. Supermarkets have a role to play but they actually are not the only ones.

You know, every time the Government has a problem and they dump it on the Commerce Commission; the Commerce Commission can’t do the things that the Minister is saying this legislation will help them to do. And that comes back to the point of the change of the legislation: rather than intent, its effect. So if somebody intends to break the law and use a dominant position, yes, of course they’re breaking the law—the Commerce Commission can take a case here. If they take an action and, you know, it was not foreseeable that it would have an impact upon a market, but it does have the effect, they can still be prosecuted, and that creates greater uncertainty and hesitancy and cost which, again, flows on to the consumer.

The final point I’d make is an example of where the Government is working with companies in New Zealand and providing taxpayer support around innovation and R & D, which is a good thing. In this case, it’s in the kiwifruit sector where much of the kiwifruit that comes to market and new variants and so on is a collaboration between the sector and growers—Zespri, in this case—and the Government. Each side puts money in, and they produce a lot of this, which is dealt with by way of intellectual property. The challenge we have is that taxpayer funds are put into this, and therefore then the intellectual property is put aside for the use of the other party that’s not the Government, and there are growers and others in New Zealand that might want access to some of this product—or innovation, I suppose—that is not being used and may never be used, but others may want to do so for the betterment of the economy of New Zealand. And there’s an example, for instance, of kiwi berries, but many, many others that are not on the level of production they should be. So I’m asking the Minister whether these changes will have an impact upon that in as far as—

Order! Order! The member’s time is up.

I move, That the question be now put.

The question is that the Minister’s amendments to Part 1 set out on Supplementary Order Paper 81 be agreed to.

The question is that the Hon Todd McClay’s amendments to Part 1 set out on Supplementary Order Paper 92 be agreed to.

The question is that the Hon Todd McClay’s amendments to Part 1 set out on Supplementary Order Paper 93 be agreed to.

The question is that the Hon Todd McClay’s amendments to Part 1 set out on Supplementary Order Paper 94 be agreed to.

The question is that Part 1 as amended stand part.

Part 1 as amended agreed to.

CHAIRPERSON (Hon Jenny Salesa): Members, we now come to Part 2. This is the debate on clauses 35 to 38, and the Schedule—transitional, related, and consequential provisions. The question is that Part 2 stand part.

Part 2 Transitional, related, and consequential amendments