The Government’s Introduction of Market Studies via the Commerce Amendment Bill is a sad day for both the Government and the National Party,” according to ACT leader David Seymour.
“The Commerce Commission, when investigating an allegation of the abuse of market power, has enormous powers. The Commission’s powers to demand information exceed those of the Police. It is extraordinary that the Commission will now be able to unleash itself on an industry without a specific allegation to respond to.
“As New Zealand Initiative Chair Roger Partridge has said, unleashing the Commission’s powers on markets where there is not even an allegation to respond to is like treating a healthy person with chemotherapy just in case they have cancer.
“New Zealand already has great difficulty with bureaucracy, too much red tape and regulation prevents us from raising productivity. Complying with a Market Study, a high stakes exercise where companies are put under subpoena for detailed data will be enormously expensive and add to the culture of bureaucracy and compliance over innovation and production.
“That this legislation allows a Minister to initiate the study is an invitation to corruption. Imagine how a Minister who has the power to impose an enormously costly exercise on a whole industry. It is not the New Zealand way for an individual to have such power over an industry at their discretion.
“The way that the legislation has been rushed through to undertake a particular market study, of the retail fuel market, when the Prime Minister has already predetermined the outcome by saying consumers are being ‘fleeced,’ confirms ACT’s worst fears that the Commerce Amendment Bill will be misused for political purposes, from the get-go.
“No doubt both Labour and National think they will make good cheaper for consumers, but they misunderstand the problem. The real problem with New Zealand’s economy is a lack of scale to support more competitors. Fundamentally, we live on the side of a mountain range the size of the United States Eastern Sea Board, sparsely populated with fewer than five million people.
“Competitors, such as the Warehouse in food, have found out how tough the New Zealand grocery market is, as did fuel retailers in the late 2000s. Other would-be competitors do not need a market study done with extraordinary powers of compulsion to decide whether or not to enter the market, they have already made their decision.
“If the policy is abysmal, the politics of this are simple,” says Mr Seymour, “National have agreed to this bad policy, in fact they initiated the policy of Market Studies while in Government. With National’s opposition gone, the Government has free reign to implement low quality policy. It is likely ACT will stand alone in opposing this legislation and we are proud to stand for sensible economics in the face of weak populism.”