Commerce and Consumer Affairs Minister Andrew Bayly is planning a “two-pronged approach” to tackle competition with the launch of a government review into New Zealand’s competition laws.
The Government will be reviewing the governance and effectiveness of the Commerce Commission and updating the competition settings in the Commerce Act.
Bayly requested the Ministry of Business, Innovation and Employment (MBIE) commission the review. The competition rules review will be led by former Commerce Commission Chairwoman and economist Paula Rebstock, alongside ex-chairman of the Australian Competition & Consumer Commission Allan Fels, and director and economist David Hunt, and will be completed by May 2025.
Bayly said OECD research had found New Zealand lags “well behind” international peers when it comes to competition.
“Unfortunately, most New Zealanders do not need an expert to tell them this,” he said.
“Kiwis face limited choice and high prices in a number of key sectors from groceries to banking and building supplies. I’m sure many Kiwis remember with frustration the plasterboard crisis in 2022, which was an extreme example of competition failure.”
The review of the Commerce Act will focus on merger settings, with Bayly noting NZ’s merger regime hasn’t had a review in over 20 years and the economic landscape has “changed significantly” in that time.
Bayly added that while mergers can improve market efficiencies, they can also “entrench market power and create monopolies.”
The review of the Commerce Commission will consider the Commission’s “organisational capability.” This will mean ensuring the consumer watchdog has the ability to make good decisions and prioritise its resources for the benefit of the NZ economy at large, Bayly said.
“In order to have robust, genuinely competitive markets, we need to have fit-for-purpose laws and a regulator that has the tools and commercial nous to oversee the law. The two go hand-in-hand,” he said.
“Improving competition to drive down the cost of living and increase productivity is one of the Government’s top priorities.”
Bayly has called for more “red tape” to be cut in NZ's duopoly dominated grocery sector and has banking competition on his to-do list as well.
Out of step
Bayly told interest.co.nz that the review of ComCom is “quite constrained” due to the Commerce Commission being subject to a lot of reviews.
“I want to be clear, I'm not being critical of the Commerce Commission at the moment, but what I want to do is make sure that if you think about it over the next 10 to 20 years, do we have enough commercial skill sets inside Commerce Commission to prioritise its workflow and be aware of what's happening in market development,” he said.
Bayly said that NZ was “increasingly out of step with international trends” and he wanted to get the country into a position where it can be more proactive when it comes to competition.
This involves stamping out any chance of “nascent” competition. Bayly, using banks as an example, described this as “picking off new competitors who potentially could be quite significant disruptors to the entire banking sector”.
“That would be a worry,” he said.
“What I'm trying to do with these reforms though, is put in place a mechanism to stop us getting to the situation where we now find ourselves in: where we do have a small number of players with significant market share.”
26 Comments
Competitive - or otherwise - markets, aren't the problem.
The Limits to Growth are the problem
And is is good to know the Interest.co team are going to cover this overarching issue next year.
Great stuff.
Yawn.
So we give up? That's what you're saying? No way out?
And spare me the ad hominen rebuttals You are framing the issue. "We're doomed." According to you. Start framing solutions. (And stop with the self-righteous, neo-religious, bullshit.)
Start framing solutions. Can you?
The solution is to stop believing or expecting that the government or the market are capable of providing solutions. We have at least 40 years of real world evidence proving this. What result are we actually wanting?
The change can only come from the grassroots. Are we prepared to revolt?
The best way to upset a lot of it is to not buy into it, stop feeding the machine. Or can we use the system to benefit others, win/win results, or do we keep using it for selfish gain?
Economic competition is ultimately a zero sum game.
So ... I say again, what solutions are yourself and PDK, proposing?
Sorry. I'm not going to live in a bunker and let my fellow man perish. Your set, especially PDK, set yourselves up as experts.
Specific solutions will get results.
Encouraging doomsday scenarios won't. All I hear from PDK is doomsday. I.e. we're fucked. Give up. Die.
I just gave you solutions and questions to ask yourself. You want the answers too?
Our set is no different from you, we just have different approaches. I do my best not to attack the messenger and simply offer alternate perspectives. I once had the same perspective as the majority. No-one said you have to live in a bunker or let your fellow man perish. I may be an "expert" in some areas according to the 10,000 hours measurement. I don't proclaim to have all the answers, I only offer an alternate way of looking and thinking about things. Only you can provide the answers for yourself.
Maybe my neuro divergence gives me the ability to see patterns and connections differently. I've already seen some commentators here begin to say things that I mentioned many years ago. Was that a ripple effect, maybe. Maybe the scepticism I had to develop in my career assists me to question the standard narrative/propaganda, plus a little extra research and study of my own. I don't expect others to come round to my way of thinking, but if it gets some to realise it's not all as it seems and they choose to buck against the system in little ways, then maybe I've made a difference. Questioning the status quo is the beginning of finding answers.
I know the issues are bigger than a lone person can take on. Start with small changes at the individual and neighbourhood level. Help those you can, however you can. Take care of your well-being first.
I have replied to him in straight manner.
He avoided.
Then comes back condescendingly, as if the interchange never happened.
Then this - 'if you can't provide a solution, don't comment' kind of nonsense. And the only 'solution these people will accept - is that there is not a problem.
Hard to imagine what it's like inside that kind of head...
Edit - I think Chris needs audial help; he doesn't seem to hear very well.
Pretend I'm the 'average voter', PDK.
If you cannot response to such .... You'll be howling in the wind as a fool.
Does that achieve your goals i.e., "howling in the wind as a fool"?
(It doesn't achieve mine which are - as much as you want to abuse me - aren't that different to yours.)
If we stopped borrowing tomorrow en masse then then the system would implode....not much chance of that at the moment, and whether that would lead to a better future is open to debate.
It'll probably implode at its current trajectory anyway.
We only think it'll implode because we don't know any better. We no longer have the wherewithal or experience to co-operate, to think outside the box. If the system was to implode because we stopped borrowing, then there's the first problem.
The programmed self interest might be too embedded, every man acting as an island.
We've given our power away to ruling institutions. How do we reclaim our power as a community? Small changes at the individual and neighbourhood level do have a ripple effect. Start there.
The problem will be like Lockdown, on steriods. No incoming, trust lost (if the FOB trading system fails, eye-ball appraisal is as far as trust will go.
Or we might just degenerate into war(s).
But the big problem inarrative-wise is energy-blindness. Productivity flat-lining these recent years, has baffled both Left and Right. The reason they're baffled, is they swallowed the economics misunderstanding. Labour was the Adam Smith-era word for energy. Now, it's fossil energy, and labour is mere noise. But they still talk of labour productivity - whereas the fossil energy application is bound by the Laws of Thermodynamics (and Sadi Carnot) and is thus subject to ever-diminishing returns (actually, so is labour, but they counted the fossil input as increasing labour output - which it wasn't). So no surprise, the trend to flat-lining. IIt was inevitable.
But put that under their noses - and I have, here, for years - and they still default to 'labour'. David Chaston here, is a classic example - saying it was good the Productivity Commission was disbanded. Actually, it wasn't. We needed - and still need - one. Badly. But we need one which understand energy, thermodynamics, and entropy. What we had was a whole lot of religious priests, in a post-Darwin era.
It does seem that up until now studies into the productivity of NZ by review haven’t been all that productive. Hopefully this latest productivity review into ComCom can produce productive productivity
That fact that every government has just ignored the results of most reviews might have something to do with the lack of improved productivity.
Is there an inverse relationship between productivity and reviews?
Unlikely. The reverse is most likely to be true. "The unexamined life is seldom worth living" provides some guidance in this matter.
But the current government's donors are excluded from this commonsense. Why?
Simply because they 'voted for it'? Who are 'they'? But they actually didn't vote for it.
So what did they vote for? Change. As they have been forever. But nothing ever changes? Why? Because the same 'policies' that enable the rich to get richer, our planet and the bulk of people to get poorer, is what benefits the rich that control governments worldwide.
Don't look at your neighbor for fault. It is not them. Nor their fault.
Follow the money.
Or we could measure the amount of resource spent reviewing something and the impact of said review(s) upon behaviours....I'd suggest that almost the only functions of reviews are delay and/or justification for a path already determined....he who pays sets the agenda.
'Reviews' as we perform them are largely a waste of resource.
If they really cared about productivity, they'd repair the incentives in our tax system. Bring back the only tax that has positive economic incentives. Land Value Tax, which disincentivises inefficient/unproductive landholdings. And reduce the taxes that disincentivise productivity. GST and Income Tax.
You mean disincentivises resilience buffering on behalf of short-term economic 'gain'?
I'd have said that was stupid.
Just saying.
Blocking mergers isn’t enough, someone needs to have the balls to break-up what is currently in place.
Without improving the current landscape, the ComCom department is just a waste of resource.
Hahahaha... more reviews to review those who are supposed to review and recommend?
This Government is sounding as clueless as the last lot.
Lol. Unless government regulates the market, competition is a joke.
Anyone with common sense can see the M&A, private equity industry, multinationals are anti competition. These institutions are purely extractive. It's a global issue and NZ Govt doesn't have the teeth.
Economic efficiencies are a joke and don't convert into anything meaningful for the workers and consumers. We might have choice, but when all the brands are owned by a few behemoths, there's no real competition.
🥱
This reads hilariously. Like: "We know all the things that are wrong with the competitive landscape, here they are and the ComCom has a lot to do with it. To fix this, we will do a review to tell us the things we already know. That will fix productivity"
Laughably incoherent. The things that will actually effect productivity is huge investments into R&D including quite a lot of support of universities (they are doing some twiddling here, one must admit) and more importantly changing the tax system to be geared for productive enterprise instead of speculative mal-investment. None of which they will touch.
Remember house prices are set to grow 7% next year, according to RBNZ. Imagine if we captured half of that and put it into making our country more productive... you do the math.
What's the productivity geared towards and what does the R&D provide?
It's like that's all we hear from the talking heads, more productivity, more R&D investment, but no tangible or measurable result.
We'd be better off breaking up many big businesses and creating more community minded local suppliers.
Holy cow... no tangible or measureable results of R&D? Are you mad? A2 milk comes from NZ research, thats one of the biggest companies in NZ. There is a whole host of companies that have had startup funding or grants or R&D funding that has helped them start or achieve. It just takes a loooong time for that to happen, around 15 years for A2 milk. From Icebreaker to LanzaTech to RocketLab to Sanford to F&P Healthcare to Americas Cup boats etc. All come from R&D.
They all produce premium product, based on NZ research - exactly where we should be targeting. Either niche or premium market segments as a small country. Unfortunately we spend tiny amounts on research and suffer long term as a result. And no government wants to up those research amounts because they do not care one whit for the long term outcomes of this country, they are just focused on getting through their term onto their next. So we have short term mindsets that can't understand the long term benefits R&D bring.
You really should watch Sir Paul Callaghan explain this: https://youtu.be/FWd4P9xD2BY?t=2543
Oh I understand the financial rhetoric. I'm asking about the tangible and measurable results that filter down, that can't be measured financially. Like I asked, what's it geared towards? Higher wages for the lowest paid workers, less work hours for all workers to enable a productive and qualitative personal life? These are the questions we need to be asking. Isn't this ideally what the economy and GDP growth was touted to eventually provide?
And if R&D is going to be a taxpayer funded incentive, I'd like to see measurable results for the taxpayer. Not more privatised profits, socialised losses, only to be sold off to foreign owners and offshore manufacturing. Those companies don't really care about the long term benefits for the country either.
R&D in isolation isn't a fix if we can't also address the other structural flaws. How do we keep it in New Zealand for real long term benefits? That's the long term vision we need, as opposed to the short-term mindset of selling to the highest bidder.
I think you are letting perfect be the enemy of good here. If we have double or triple or 10x the amount of hi-tech agri, food, technology businesses operating in this country, what do you think the effect on our economy will be? It doesn't matter if they are privately owned, they provide high paying employment and the founders will usually stay in NZ and invest their earnings in other hi-tech industries (think Peter Beck heavily involved with Halter, Anna Mowbray's new recruitment app investment, Drury creating multiple successful businesses etc).
And watch the video, Callaghan goes on to talk about the cumulative growth of hi-tech businesses started by funded R&D.
If you aren't convinced by evidence staring you in the face, what's your solution for us to grow and increase our living standards? Because we tried selling milk to China and selling houses to each other and neither of those worked...
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