TOP tack­les out ‘com­pe­ti­tion prob­lem’

Sunday Star-Times - - BUSINESS - ROB STOCK

There’s wide­spread com­pe­ti­tion fail­ure in New Zealand says TOP deputy leader Ge­off Sim­mons, but nei­ther of the two main par­ties are talk­ing about it. If TOP got its way, big, largely for­eign-owned busi­nesses would face a tough rewrit­ing of the Com­merce Act, and a sys­tem of reg­u­lar mon­i­tor­ing.

‘‘Our Com­merce Act is a joke re­ally,’’ says Sim­mons, an econ­o­mist by train­ing. ‘‘It is clear that the sys­tem isn’t work­ing.’’ New Zealand has some very con­cen­trated in­dus­tries, in part thanks to the small size of the coun­try, though there are in­di­ca­tions some in­dus­tries have hit peak con­cen­tra­tion, with the Com­merce Com­mis­sion hav­ing de­clined Sun­corp’s at­tempt to take over ri­val in­surer Tower.

But the cost of liv­ing is very high, and com­plaints of abuse of power flood into the Com­merce Com­mis­sion, which re­vealed this week that in the 12 months to the end of June, there were 230 com­plaints al­leg­ing crimes against the Com­merce Act, with 68 of them be­ing al­le­ga­tions of ‘‘tak­ing ad­van­tage of their mar­ket power’’.

Another 60 com­plaints were about en­ter­ing into ar­range­ments that sub­stan­tially less­ened com­pe­ti­tion, and 18 of ar­range­ments that lim­ited sup­ply.

Build­ing, petrol and re­tail were the in­dus­tries most com­plained about.

But these 230 com­plaints, of­ten from in­dus­try par­tic­i­pants, turned into just three do­mes­tic in­ves­ti­ga­tions.

Sim­mons says that’s a re­sult of our weak com­pe­ti­tion law, and we should fol­low Aus­tralia and the UK in rewrit­ing it.

‘‘There’s no doubt in my mind that they are ahead of us in deal­ing with this is­sue of mar­ket power,’’ Sim­mons says.

TOP wants to ‘‘re­view’’ sec­tion 36 of the Com­merce Act, which is sup­posed to out­law abuse of mar­ket power, but Sim­mons says it has re­sulted in no re­cent pros­e­cu­tions be­cause it is so weak.

‘‘Gov­ern­ment knows it is not be­ing en­forced but have sat on their hands.’’

‘‘What we are re­ally talk­ing about is a re­view of that clause in par­tic­u­lar, and then we can have the ar­gu­ments.’’

TOP would also in­tro­duce ‘‘reg­u­lar mon­i­tor­ing of mo­nop­o­lies and oli­gop­ol­ies for abuse of mar­ket power’’, which Sim­mons says, hap­pens over­seas.

The ad hoc re­cent petrol price re­view is no way to ap­proach mon­i­tor­ing mar­ket power, Sim­mons says, though he wel­comed it be­cause it high­lighted the is­sue.

‘‘These com­pa­nies need to know they are be­ing watched,’’ Sim­mons says.

New Zealand just seems to ac­cept a lack of com­pe­ti­tion is its fate, he be­lieves.

‘‘We seem to have just ended up here on the ba­sis that we are a small coun­try, and we just have to suck it up. We think that is crazy,’’ Sim­mons says.

The com­pe­ti­tion ‘‘re­view’’ pol­icy lacks de­tail, though that ac­cu­sa­tion can be lev­elled at many poli­cies put for­ward, in­clud­ing some by the ma­jor par­ties.

TOP does not yet know what sec­tion 36 should say. Nor has it worked out who would qual­ify for mon­i­tor­ing, or who would do the mon­i­tor­ing, though the Min­istry of Busi­ness, In­no­va­tion and Em­ploy­ment seems like a nat­u­ral home, Sim­mons says.

Mon­i­tor­ing can quickly be­come reg­u­lat­ing.

‘‘When it be­comes clear that an in­dus­try is not re­spond­ing to the ‘sun­light’, that nat­u­rally fol­lows.’’

The party’s plan is to trans­form the econ­omy with more com­pe­ti­tion, but also by shift­ing taxes of in­come, and onto as­se­town­ing, be­liev­ing that would free in­no­va­tion and re­ward ef­fort.

Sim­mons says: ‘‘We see our­selves as quite, quite dif­fer­ent from other par­ties. This isn’t left, or right. We are pro-mar­ket, but we think the mar­ket needs to be built on a dif­fer­ent foun­da­tion where ev­ery­one gets a fair crack.’’

The party isn’t yet polling at a level to get it past the 5 per cent party vote mark that would give its MPs a voice in Par­lia­ment.

Ge­off Sim­mons

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