Cheap win on gas might haunt PM
Ardern not only nominates subject of probe but directs the outcome.
Just after he became Commerce Minister, Kris Faafoi was adamant he wanted to ‘‘take the politics out’’ of who decided whether banks, supermarkets or petrol companies should be investigated.
For the first time the Commerce Commission is to be granted powers to look into parts of the economy it had never been able to go into before. The question then becomes, who decides which rocks it should look under? The Government, or the experts? It is a key question with no perfect answer.
Politicians naturally want the right to launch the types of investigations the commission will soon undertake. But governments of all colours can be captured by corporate interests, or by public cries to ‘‘do something’’ as we are now seeing with petrol prices.
In an early interview, Faafoi repeatedly said that the commission was the expert and should decide. ‘‘We’re quite keen to . . . take the politics out of it and let them do it.’’
This was in contrast with National, which had wanted the minister of commerce to make the call, Faafoi said.
By Monday, Jacinda Ardern exposed how naive Faafoi’s early comments had been. The former journalist looked on at the weekly post-Cabinet press conference, as the Prime Minister explained just how political it was willing to be with so-called ‘‘market study’’ powers.
Ministers will effectively bid for Commerce Commission investigations. Faafoi would be deciding what it would be, and Ardern immediately told him what his decision would be as she personally nominated the fuel market.
If that was not enough, Ardern did her best to predetermine the outcome, saying consumers were ‘‘being fleeced’’ by the petrol companies.
Calls from governing MPs for other studies are now inevitable. NZ First Shane Jones appeared to call shotgun on the banks more than a month ago and by Thursday the Greens were voting for the supermarkets.
Jones, an ongoing headache to the Labour part of the Government, will be even harder to silence after the way Ardern has attacked the fuel industry.
The clever people at the commission would probably have come up with these sectors all by themselves, but as changes to the Commerce Act are rushed through Parliament, political points needed to be scored.
Ardern’s response to the growing protest over the pump price was a cheap win that could cause her problems later.
There is at least a symbolic contradiction between standing up for cheaper petrol with her stance on climate change.
The day after her announcement she appeared to suggest motorists could expect tangible action ‘‘early next year’’ when in fact any investigation could take 12 months, is not certain to be properly under way by Christmas and could easily be challenged in court.
Exactly who is being ‘‘fleeced’’ when buying petrol is likely to be more complex than Ardern appears to believe.
In her anecdotes about petrol prices, Ardern has wondered aloud why prices in Auckland (where there is an extra 11.5c a litre regional fuel tax) are sometimes higher than Wellington.
For years, the major petrol companies have been accused of charging more in areas where there is little competition.
A likely consequence is that if the Government brings more competition to new areas, it could mean higher margins in others. Will motorists in Auckland thank her then?
Ardern is also being optimistic in the extreme if she does not see uncomfortable questions ahead about whether the regional fuel tax is spreading.
Finally, there is the fear that Ardern has risked undermining the independence of the commission, not just by telling it what to do, but indicating what it would find when it looked.
A leading competition lawyer described Ardern’s comments as unprecedented. We should hope the independent competition watchdog sees fit to assert its
independence.
Calls from governing MPs for other studies are now inevitable.