ComCom Right on Mobile Roaming - But There's a Wider Concern

The Commerce Commission has done exactly the right thing in continuing the regulation of mobile roaming as set out in its media release today. The fight for competition in telecommunications was an incredibly long and hard-won battle. New entrants will continue to come along and stimulate competition, but only if we keep the necessary regulation in place as is essential to network industries. So, ten out of ten to Telecommunications Commissioner Tristan Gilbertson and his team.

But as the election campaign ramps up, I am seriously concerned about the lack of attention given to market failure. We have a tiny handful of key industries where this is rampant - supermarkets, banking, building supplies and possibly electricity are examples. Market failure is driving inflation much, much harder than the imported component.

But this is getting almost no political attention.

The new Grocery Commissioner and his team of 23 have had little time to settle in. (How the hell did it take 2 years just to get the bums on seats to start dealing with an issue which is the direct cause of many Kiwi kids starving?) But I really worry that by focusing on the dysfunctional relationship arising from the power imbalance with suppliers, the Commission and Government will resolve their industry code and say "Job Done" while leaving the vastly bigger economic issue of the effect on consumer prices in the too hard basket. Recent claims that supermarket margin percentages have increased 2 or 3 fold since the 1990s underline the massive rort that is making our country one of the world's dearest in which to buy basic food.

Underlying all this is politics. The left are well-intentioned but lacking the business experience or basic competency to fully address the problem. The right are consumed by slogans about unnecessary regulation, totally captured by the "business" sector, and failing to distinguish between the handful of massive corporates who have surrounded themselves with a moat of market failure, and the tens of thousands of SMEs who, like consumers, are their victims.

I hope a few journalists will start asking questions of candidates. This is utterly crucial to our future.