Fuel Industry Amendment Bill

Members, we come now to the Fuel Industry Amendment Bill. We come first to Part 1.

Point of order, Mr Chair. I seek leave for all provisions to be taken as one question.

Leave is sought for that purpose. Is there any objection? There is none. The question is that Parts 1 and 2, the Schedule, and clauses 1 to 3 stand part.

Well, thank you, Mr Chair. It’s a pleasure to speak on this Fuel Industry Amendment Bill. The National Party doesn’t support this bill. In fact, we see some real risks with this particular bill. Price controls often have perverse effects. If they were a good idea, everything would be controlled—every price would be controlled, rather than it being a very rare event. We saw through the Economic Development, Science and Innovation Committee very little in the way of justification for price controls. There were some significant questions around that.

A good example of where price control doesn’t work is in the UK with the gas market over there, where price caps were brought in with rising wholesale gas prices, and, in fact, it led to widespread failures and a de facto nationalisation of the gas industry over in that area. What’s to say that’s not going to happen here? There certainly hasn’t been a case made for it other than wanting to have central control—unjustifiably, in our view.

But in new section 29A, “Interpretation and overview” inserted by clause 4, it goes through, particularly in new section 29A(2)(a): “the Commission holds an inquiry into whether to regulate the terminal gate prices, and then makes a recommendation to the Minister under section 29G:”. But in new section 29A(2)(d): “for each [of the] regulated terminal gate price (or group of regulated terminal gate prices), the Commission makes a determination under section 29L specifying the pricing principles or [the] pricing methodologies that apply.” So what I would like the Minister to tell us is what the definition is of the pricing principles. What pricing principles are acceptable? What pricing principles are not acceptable? I can’t see any definition in the bill of what those principles are, and I’d really like to hear from that.

It also says “or pricing methodologies that apply.” Again, I would like to know what the definition of those pricing methodologies is, and what would be viewed as good methodologies, what would be viewed as bad methodologies. What would lead to the Minister or the commission recommending to the Minister that price controls be implemented? That is a key part to this piece of legislation, and I think most members would agree that if you’re going to have price controls, that needs to be incredibly well defined. It needs to be beyond reproach.

It’s a significant impost on a free market, having a body like the Commerce Commission reaching into those businesses and actually telling them how to run their day-to-day business by setting a price. How do we know? Because what normally happens is that the market will settle, and the market will settle at a price that might be not the lowest price; they’ll work it out not by collaborating together, but with those sorts of controls in the market you’re not going to find the innovators. The innovations are not going to come to lead to lower prices, which is what, ultimately, the consumers would benefit from and our economy would benefit from, but, instead, we’ll end up with a controlled sector that will have unnecessarily high prices, probably. I think that’s a likely outcome from this particular bill. But if we could have an explanation for what those pricing principles are and what those pricing methodologies are, that might help us understand what was the genesis for this bill and how that’s mechanically going to be worked through so that we can see whether the actual work went in behind this before this came out, or was it a knee-jerk reaction?

There is a thing in the fuel sector known as the Gull effect—that is, where the Gull company goes and sets up in business, the prices drop in that region, which is exactly what a free market does. That’s what happens. Why don’t we allow that to happen? No, no, because we’re going to control it. It’s also Timaru Oil Services, and, in my patch anyway, NPD. They are probably the lowest. They’ve certainly had a lowering effect. All of the fuel companies try to keep up with them, but they have innovative pricing promotions that they put out on quite a regular basis. They email their customers when it’s coming up, and their fuel stations are widely frequented when they’ve got those low-price deals on.

So what I want to know is: will these pricing methodologies and pricing principles preclude companies from doing that? Why would they bother if the price is going to be fixed anyway by the all-knowing Commerce Commission? I think it’s highly unlikely we’ll end up with a very fair pricing regime at all; we’ll end up with more expensive prices. But I’m sure that the Minister’s going to give us a good answer and tell us exactly what those principles are.

I follow on from my good colleague and friend Stuart Smith, who’s asked some really sensible questions. While the Minister’s considering how to answer those, perhaps she could also let the committee know where in the world the imposition of price regulation on a commodity product that we now import entirely has ever worked. She might recall that in the COVID lockdown times, we actually ended up at the bottom of the supply chain and that we lost supply not only so much of fuel but also of many commodities where we were the last ship coming in. All our ships went off to Australian ports, rather than ours, because they had more cargo on board. What’s the guarantee that price fixing by the Commerce Commission would actually not lead to some commodities, such as fuel, suddenly not turning up when it should?

I would have thought that, given that the Government has decided in its—I would have said “wisdom”, but that’s just too generous—has decided on a whim to end the offshore oil and gas exploration and to allow the Marsden Point refinery to close without a whimper—not even a whimper, the company told me. But they are actually now putting us in a difficult position of saying, “And now we’re going to be one of the very few liberal democracies in the world that thinks that a commerce commission, a Government entity, as such, has the right to determine the price of an internationally traded commodity.”

She might be well aware too that in some parts of the world where this has been tried, it can lead to all sorts of issues around supply. But also, as my colleague Stuart Smith pointed out, the issue around not actually encouraging competition, because certainly I am one of the many people who has the Gaspy app on my phone and I look at the fuel prices of various places when I’m going to fill up my car, and I make an informed decision based on the prices and what it is that I’m paying for and where I am and where those fuel companies are based. I’d like to hear from the Minister about where this has been tried and where it has worked. Has it led to less competition or more competition? Has it led to more supply or less supply?

The other thing, while the Minister is thinking of answers to these questions, she might like to answer: since the fuel taxes that are paid on fuel are, in fact, such a large proportion of the cost of fuel, and also to those of us who buy our fuel, she might want to ask whether the Government is going to continue down the path of taxing it at the level that it is, given that I note from 1 July that the rebate that had been granted on the fuel taxes is coming off and we are all expecting, those of us who pay for our own fuel, that our prices are going to go up around 29c a litre. None of that is money that is going to the fuel companies; all of it is money going to the Government’s coffers. So I think, if we’re going to have a restriction, or any threat of restriction, from the Commerce Commission—not always an entity that has always covered itself in glory on these matters—perhaps we might wonder whether or not they might consider, as the Government for the few months that they’re going to be there, whether or not they’d like to bring their own taxes down.

There are a couple of questions in there that I’d like to address with this contribution. A member asked about the principles and methodologies that lie behind this.

But before I get into that, I think it’s important to go through exactly what the purpose of this bill is, where it came from, and why it is happening, very briefly. This, of course, is not about a regime to set and to have Government setting the price of petrol in the ordinary course of events; what it is is providing a regulatory backstop where there is a consideration that the market is not functioning in a competitive way to the benefit of consumers. Of course, what we’re doing here was a recommendation of the fuel market study that the Commerce Commission carried out. Mr Smith talked at length about the Gull effect. Well, Gull have said that they wouldn’t be able to operate in parts of the country without the terminal gate pricing regime that was put in place under the original piece of legislation. They’ve come out and explicitly said that. The ability for us to actually have a more competitive South Island fuel market is down to the changes that have been affected by the legislation that has been put in place.

In terms of the questions around the principles and methodology, there was a piece of work that consciously decided that you could not get too prescriptive around what that would be. I’ll go through the section of the Act that sets out what the criteria for decision making of when to trigger the backstop comes through. But in terms of being able to anticipate every set of circumstances and prescribe that in the legislation, it was not the best way through.

But I will advise Mr Smith to turn to new section 29L, inserted by clause 4, of the bill, and about the commission determination about how the regulation applies. So in (1A) of that new section, it talks about “In considering whether the Act’s purpose is promoted in making a determination, the Commission must take into account the outcomes that would be expected in a competitive market, including wholesale suppliers’ incentives to invest to meet the demand of end users of engine fuel products.” So the scenario that the Hon Judith Collins was talking about in terms of the driving out competition wouldn’t apply, because this is triggering if there is a situation where it is demonstrably that a company is working outside of what you’d expect in a competitive market. It gives the Commerce Commission the ability to investigate that, to use the tools that it has at its disposal, and see whether that is the case.

I’ll also briefly address the points that the Hon Judith Collins made about security of supply. I guess the other important piece of work that we have been doing since the commercial decision was made to close down Marsden Point, of course, is about our onshore stockholdings. That’s not in this bill; that is a separate piece of legislation. But as that honourable member will know, who herself is a former Minister of Energy, that Marsden Point simply was not set up to refine the light crudes that we produce here in New Zealand. In order to do that, there would have had to have been a substantial reconfiguration of Marsden Point. I’m always interested when I hear the National Party discuss this, because I never once heard them suggest that they were going to put up the hundreds of millions of dollars to buy it and make that conversion. But if that’s a point of debate that they want to continue through, I think it would be an interesting one for us to have. Thank you, Mr Chairman.

Thank you, Mr Chair, and thank you, Minister, for the opportunity to ask some questions about this bill. Now, what is the problem that this bill tries to solve? Apparently, some fuel companies might set wholesale fuel prices that the Minister considers excessive or that somebody at the Commerce Commission decides, based on principles unknown, that a fuel company is charging an excessive amount for petrol and diesel at the terminal gate.

Well, we have terminal gate pricing. I’ve just jumped online and had a look at Z Energy and Mobil. If I was a registered terminal gate customer, I could send my truck and trailer there right now to pick up a load of gas from Wiri or, if I was in the South Island, from Timaru or Dunedin, and I know what the terminal gate price is. Now, that’s not to say I couldn’t get a better price if I was a bigger customer and I was filling up dozens and dozens of diggers and trucks a day, because terminal gate pricing is just one mechanism to indicate what the wholesale price is generally. But that’s not to say that some customers can’t get better deals because they buy more fuel. Maybe they pay on seven-day terms rather than on 28-day terms; maybe they’re just more trustworthy and have a better credit rating so they get better prices.

What is the problem this Government is trying to solve with this bill? Well, when I look at the wholesale price of fuel right now, for 91 petrol, the importer’s cost is $1.018, and this is according to the Ministry of Business, Innovation and Employment’s (MBIE) own weekly fuel price monitoring data, which is available to anybody who wants to jump on the MBIE website and search for it. So the cost of 91 petrol at the moment is about $1.01 per litre to import. The margin on that, the importer’s margin, is about 32.9c, but remember that’s margin; it’s not profit margin. They still have to pay costs out of that.

Then the ETS—the emissions trading scheme—price, which means that everybody who fills up with petrol and diesel pays for their emissions; the emissions trading scheme price on a litre of 91 is 13.8c per litre. The fuel excise duty is 86.3c per litre, and the GST is 30.6c per litre. So for a litre of 91 petrol, it costs $1.01 to get into the country. The importer makes 32c a litre gross, but the Government takes $1.30 a litre—the Government takes $1.30 a litre, and the importer’s margin is 32c. So if there was a problem with the cost of fuel, this Government just needs to walk up to a very small mirror, because it is the problem—a small mirror will show the Government that it is the problem.

So what would make New Zealanders feel better about paying this fuel tax—this $1.30 a litre? Is it because they get world-class roads? Is it because there’s no potholes on their journey? Even today, State Highway 1, Dome Valley, was closed due to a slip. Trucks and private vehicles were being rerouted along roads that New Zealand Transport Agency has said are unsuitable for heavy vehicles. How many times has Dome Valley been closed? Is this climate change? Is it excessive rainfall caused by climate change? Did this Government declare a nuclear-free moment—that climate change was this generation’s nuclear-free moment, and, if so, why aren’t they spending some of this fuel tax money they collect from motorists on actually fixing roads? Or maybe the problem’s not with the wholesale fuel price; maybe it’s that the public have lost trust in this Government to spend money on important things, things that New Zealanders need, like roads so they can get around safely, that don’t wash out or have rocks fall on to them every time there is a shower of rain?

So do you think it’s bad now that the price of 91 petrol—$2.65 a litre, roundabout, when you add up the stats on MBIE’s weekly fuel price monitor—that will soon go up 25c a litre; on 30 June the Government’s 25c a litre cut to fuel excise duty expires and so the petrol price that Kiwis will pay at the pump jumps from $2.65 to $2.90 a litre. So, Minister, a question: do you think Kiwis feel like they’re getting value for money for the $1.30 a litre, soon to be $1.55 a litre that they’re paying this Government to provide transportation services? Are Kiwis getting value for money—motorists getting value for money, Minister? Secondly—

CHAIRPERSON (Greg O’Connor): Mr Court, now, you’ve referred to the bill but you’re not talking to it. Can we come back to the bill; you’ve had a pretty good run. We are hearing it as one part so I’ve been fairly generous, but now you’re into your second five-minute slot; let’s talk about the bill, please.

SIMON COURT: Thank you, Mr Chair. So the question is: for $1.30 a litre, what additional increase in the wholesale fuel price—currently $1.01 per litre—how much would it have to move, to trigger the Government or the Commerce Commission, before they would look at the margin and they would say, “Crikey, a margin’s 32 cents a litre now.”? How much would that margin have to increase, Minister, before that would trigger a review of fuel prices and potential imposition of a wholesale price? Minister.

I’ll answer the question that came at the end of that contribution. I refer the member to new section 29C of the legislation about “When terminal gate prices may be regulated”. It’s for the relevant specified engine fuel and bulk storage facility that were above what would be expected in a competitive market. Now, obviously, in a competitive market, you’re going to have a broad spread of prices. Everybody can see when they’re driving around their own patch that prices at self-service petrol stations are much lower than they are at full-service petrol stations. There will also, therefore, be differences in terminal gate pricing in different places, but there are tests that need to be applied about what can be reasonably expected in a competitive market. This is about the functioning of that competitive market.

We go then through to 29D, which specifies and lays out how the inquiry would be triggered and, then, through to 29E, the “Commission inquiry into particular terminal gate prices”. So there are various ways that it can be triggered: the commission can do it itself; the Minister can write to the commission and request it, but then there has to be an inquiry—much like we have with the fuel market study. It’s not just the commission makes a decision that they think that there’s some anti-competitive behaviour and, therefore, can regulate the price at the terminal gate; there are specified processes that need to be gone through.

Thank you, Mr Chair. Well, the Minister of Energy and Resources did attempt to answer the question I asked about pricing principles and methodologies, but she didn’t actually answer the question. All we found is—from her answer, to paraphrase her—they didn’t want too much control to limit their scope for making an inquiry and what actually defined the principles and the pricing methodologies.

But I’d turn your attention to new section 29C, inserted by clause 4, “When terminal gate prices may be regulated”, because it goes, “The Commission may make a recommendation that price regulation should be imposed on terminal gate prices only if it is satisfied that the relevant wholesale supplier has posted terminal gate prices, for the relevant specified engine fuel and bulk storage facility, that were above what would be expected in a competitive market.” In order to do that, you have to know—not you, of course, Mr Chair, but the Commerce Commission—would have to know what would be an expected price in a competitive market. One would expect that if they were to know that, they would need to know the principles and the methodologies that were utilised by other companies to ascertain those prices. But we didn’t hear that from the Minister, so that doesn’t seem like that’s part of the scope of the commission’s remit to investigate the market as to whether it’s competitive or not.

This is giving almost like “Henry VIII” - type powers to the commission on a whim, essentially, because either the Minister, in writing, or the commission can decide to undertake an inquiry themselves. They can go out and do it. If they say it’s not competitive, it’s not competitive. If they say the pricing methodologies are not good, they’re not good. If the principles that are used are not acceptable to their standards, they’re not acceptable. But any other type of regulation like this, we would all expect—I think very fair to expect—a definition that would be robust and would be able to be anchored in the legislation so that those companies that are subject to this, and the rest of the market in fact, can go back and look at that and say, “Well, actually, that’s fair enough, they’re right. The commission is right, that company is not sticking to good market practices.”, or not. But there’s nothing; there’s absolutely nothing. It was criticised by submitters that there was no definition. It’s, I think, criticised by any right-thinking business people that you would expect, and, I think, the legal professional as well. Why would you have something that’s not defined like that? That’s just unbelievable. Everyone has the right to know the law—you don’t have to know it, but you should be able to know it if you want to—and yet you can’t in this. We can’t; it’s just ridiculous.

So I don’t think that’s a good enough explanation, Minister. Your officials must surely have a better explanation than that. I mean, we’re talking about a serious issue here, and, going on and giving an example, it says, “However, if only 1 supplier at 1 bulk storage facility has posted terminal gate prices for diesel that were above what would be expected in a competitive market, the Commission may recommend regulation only in respect of the diesel terminal gate prices”. But how much difference does there have to be to trigger that? And I think the Minister alluded to not expecting all the companies to have the same prices in the same place, but it seems to me that that’s practically what they’re going to do. How much difference would be expected to trigger a non-competitive market, Minister? That’s what I’d like to know. Thank you.

Thank you, Mr Chair. Look, first of all, I’m going to congratulate the Minister for doing Supplementary Order Paper 364, because at least the Minister has attempted to identify a couple of the costs: namely there is, publicly listed, the total excise duty and the total amount to be paid within the current market price of the emissions trading scheme. So it shows you can do some of it, but I think what my good colleague Mr Smith is talking about is very, very relevant. I used to chair a shipping company and we used to ship fuel, and I also sold New Zealand’s largest fuel bunker business some years ago, which was sold to a company called Stolt-Nielsen, on behalf of the owners from Norway. So I do have a little bit of understanding of the cost structure and the way the market works, and I find it absurd that the Minister is way up there in the stratosphere talking in this bill about, sort of—not even quite principles, because it’s not quite clear, when I look at new section 29D, inserted by clause 4, it is just a statement of intent, not even dealing with the issue of principles.

So, first of all, if we’re bringing fuel from now Singapore, which is the most likely place to bring fuel from now, the size of the ship will matter quite considerably. And when you get it here, you’ve also then got the issue of how you transport it to, maybe where Mr Smith comes from in Blenheim—whether you’re going to use the local shipping fleet or whether you’re going to ship it by trucks, and of course, both have quite different cost structures. So, even in the shipping side of the logistics chain, there are considerable differences, and I know that because we had to look at where we sourced the fuel from, and then how we shipped it.

The second thing is, actually, even around the logistics and the maintenance of bulk fuel tanks, whilst they do last for a long period of time, there are maintenance costs associated with them. Someone with an embedded advantage where they already have existing fuel tanks—maybe being modernised, maybe not—that will have a considerable bearing on the cost structure of the fuel container costs, so that’s another driver. And also the driver for the bulk fuel container business is how often they’re turning over stock, because, of course, the stock is a major part of that business. So all of those things—you know, if you’re from business, you understand these concepts around stock and the cost of holding stock. So, even if you’ve got a new operation vs an old one, there will be considerable differences in terms of the maintenance costs and all of those associated things.

Then you’ve got a third overlay, which is that people act differently in different times in markets, and you will get some people who choose to put a discount on, because, at that period in time, they want to buy a market share for a reason that—maybe they’ve got really old stock that they want to get rid of and therefore they will mark down the price and it’s perceived that they’re driving down the price. So those happen from time to time, and it happens every day in business. So there are three identified clumps of costs, and for someone to divinely come up with an assertion that “Hey, this is out of order”—that one particular supplier’s costs are so different that they are now going to be brought under this regime is a tall ask for the commission. I think, at best, the commission will be able to ascertain whether, in fact, the price of fuel that is acquired or purchased in Singapore—whether we’re paying differing amounts for volume and the price that that fuel is delivered to New Zealand—but beyond that, that is a really difficult undertaking to be able to make on behalf of the commission, and that’s why I’m so disappointed reading this bill.

I haven’t been part of the select committee, but I can understand why this is looking like just a bill to try and pass something to make us look good, but it provides no guidance; no instructions in terms of how the Commerce Commission will do its job, and certainly not for market participants.

Thank you, Mr Chair. Just following on from my colleague Stuart Smith’s comments—Minister, I’m really, really puzzled as to how a lack of competition in terminal gate pricing could possibly even be determined by the commission. When I look at the terminals shown here [Holds up an electronic tablet]—and this is available for download; this is available online right now—there is only one terminal in Northland, at Marsden Point; there is one in Auckland at Wiri; one in Napier, Nelson, Christchurch, Dunedin; two in Timaru, Wellington, and Tauranga. Most of the country, the major metros, have only one terminal—how is it possible to determine whether the price posted at the gate doesn’t reflect a competitive wholesale market? There’s only one terminal—I can’t send my truck and trailers down the road to fill up at someone else’s terminal. I can’t drive past the terminal and compare it to the next one down the road to get a feel as if someone’s paying too much. It just sounds completely impractical, Minister. It sounds like a response to the wrong problem.

Now, Minister, I don’t think it’s worthwhile, really, debating the merits of the bill, because, if there’s a change of Government, the ACT Party will act to repeal it, because we’re fundamentally opposed to the Government setting prices. But I do want to offer you an opportunity to comment on the Supplementary Order Paper on the amendment to the bill that ACT has proposed, that the terminal gate price [Refers to electronic tablet]—and here we have an example of terminal gate pricing: premium 95 $2.32; regular 91 $2.09; diesel $1.59. That’s at Marsden Point. What ACT is proposing—in an amendment to clause 6 in Part 2 of the bill—is that the terminal gate price must publicly list, as part of the overall price, the total excise duty and excise equivalent duty included in the price and cents per litre. That’s the amount of fuel tax that people will pay on that product and the total amount likely to be paid at the current market price of New Zealand units under the emissions trading scheme. It’s the total cost per litre that Kiwis will pay if they buy that fuel at a wholesale price on top of the wholesale price and the importers margin.

So, Minister, could you just firstly give your perspective: how are we to know whether competition is in fact insufficient when there is only one terminal in most of the metros? And secondly, Minister, will you support ACT’s proposed amendment that terminal gate pricing should include excise duty, fuel tax, and the emissions trading scheme cost? Thank you, Minister.

I will take a quick call to again address questions posed by Mr Court and Mr Smith around what is prescribed in new section 29C of the bill, inserted by clause 4, about when, and the test of when the terminal gate price may be regulated—what is the trigger for that happening? One of the things that I do point members to is that this is actually a recommendation of our market study into fuel pricing to protect consumers. I’m hearing a whole lot of arguments coming from that side of the Chamber about how we have to protect the oil companies and the fuel companies. What I’ve really considered is how we ensure that consumers are getting a fair deal when they go to the pump.

So prices that are not consistent with what is expected in a competitive market are terminal gate prices that are higher than would be experienced if competition were causing downward pressure on those prices. Since we began monitoring—and the Commerce Commission has the tools and the powers to begin monitoring this because of changes that we made—what we’ve seen is that early analysis indicates that terminal gate prices are being set higher than expected compared to average fixed wholesale contract prices and terminal gate prices in Australia. That’s when you adjust for all the differences. So I think what we’re seeing is that there needs to be vigilance, there needs to be the transparency around the pricing so it can be monitored, and if consumers are not getting a fair deal then there needs to be a way to deal with that.

I will also just answer Mr Court’s questions around whether or not the Government will be supporting his Supplementary Order Paper (SOP) 364. And I thank the member for taking the time to put the work in to put up an SOP, but we won’t be supporting it on this occasion and there’s some good reasons for that. The member is suggesting that we add into that the GST and the emissions trading scheme charging. This would not be meaningful in terms of the transparency. There are a number of other costs, if you were looking for full transparency, that you’d want to put in there. Some members have alluded to some of these as the complexity, and I think Mr Bayly talked about this, and this is something of course that the Commerce Commission has the powers to take into account, which is the full context—the operating costs of the terminal in its particular location.

We also have the capital costs and the way in which they can be fairly attributed in a working competitive market. These are all things that you would not be—you would not be displaying all of this. You also wouldn’t be putting in place the profit margins. So I’m sorry, Mr Court, but the advice that I’ve got is that although you could argue that there could be greater transparency by displaying all of these things, this would cause an increase in the regulatory burden on these businesses, and not something this Government is prepared to do.

Thank you very much, Mr Chair. I’ve been sitting here listening to some of the pertinent questions that my colleagues have actually asked the Minister. I’m just a little bit baffled. In relation to new section 29C, it is about, “terminal gate prices only if it is satisfied that the relevant wholesale supplier has posted terminal gate prices, for the relevant specified engine fuel and bulk storage facility, that were above what would be expected in a competitive market.” So it could potentially be one supplier out of the five major ones—and there are a couple of others who actually do, in fact, supply—and I’d have thought that we wanted competitive pricing. If one goes over, doesn’t the market actually fix that anyway? The wholesale market would actually decide that they’re not going to purchase a very high-priced wholesaler. I thought the market actually fixes that problem.

Why are we wasting time wanting to make an inquiry? The Minister potentially could actually, on 29D, have an inquiry triggered. I know that my colleagues have talked about the trigger and the measurement, but I just don’t understand where this is actually going. I just thought if you leave it to the market, it’d be sorted. It’s not like we have two wholesalers, one who is going higher. Well, good luck to the one who’s actually supplying it cheaper, because they’ll get all of the customers. If one of them is actually selling it for a much, much more expensive price, that’s called market pricing. So if the market pricing is not complied to and with, we’re going to trigger an inquiry by the Commerce Commission or the Minister writing.

So I’m just trying to understand what the Minister’s reasoning is for actually doing this, because I am still really, really baffled. It’s sort of like saying, “Oh well, if you own a house—one in Christchurch and one in Auckland—the same house but one of them actually happens to sell at a much more higher price, let’s do an inquiry.” Well, it is the market that determines the price. If someone actually decides to sell it for a much, much higher price, the customer base would decide not to do it.

So I think it would be very, very pertinent if the Minister could actually tell us the answer in terms of how the Minister, on 29D, will decide—(1)(a)—where she says, “The Commission … must hold an inquiry if required to do so by the Minister in writing”. I’m trying to understand what will trigger the Minister to write to the commission, to do the inquiry, and what will be the reasoning behind it.

I move, That the question be now put.

Point of order. Thank you, Mr Chair. We did not object when they moved to take the whole bill as one part, and—

CHAIRPERSON (Greg O’Connor): Mr Smith, are you predicting what I was going to do?

STUART SMITH: No, I wasn’t. I was just going to say that in the spirit of an informed decision, we did that on the basis—

Well, Mr Smith, I don’t need any advice, thank you. I will say to Ms Lee that coming in late doesn’t mean that a question hasn’t already been asked, which it has. However, the time has come for me to report progress on this bill.

Progress to be reported.

House resumed.