Commerce Act Review - Opportunity Lost

A let-down! That’s my reaction this morning after attending the announcement of a review of the Commerce Act, at the Wellington Chamber of Commerce, by Ministers Willis, Seymour and Simpson.

If there was ever an opportunity for the government to show commitment to confronting the epidemic of market failure which is changing the social and economic fabric of our country, this was it.

But no. Nothing that will reverse the position our consumers and small businesses find ourselves in today. Nothing.

Sure, there were one or two good changes signaled. The Commerce Commission will get some stronger powers. Informants supplying sensitive information to its projects will be less likely to be “outed” by the Official Information Act. And it will have more power to request and accept behavioral undertakings from merger applicants.

All those will be good for the next generation of Kiwis. But they won't make a jot of difference to the issues we face today - with broken markets in every direction, protected from political interference by political donations, revolving doors between parliament and the lobbying industry, and “chumocracy.”

I also have a sense that the “business” input this government listens to is heavily weighted in favor of big and powerful business, while ignoring the SMEs who represent innovation, the next generation of commerce, and our country’s future. That's underlined by the emphasis on removing regulatory constraints imposed on bigger businesses, which cost them money to comply, with little recognition that often these constraints are necessary to protect the interests of smaller new entrants against market bullying.

Looking back to our one example of reversing agglomeration of market power – Telecom in the 2000s – I can only reflect that if the current crop of politicians had been in office in those days, Kiwis would still be paying twice the going rate for our phone and Internet services with only one or two firms in the market.

Maybe I'm wrong. Maybe Nicola Willis has another trick up her sleeve to surprise us with. But I fear not.

So consumers will have to keep cutting down on our food, warmth and housing expectations until at some point a future government distances itself from the self-interested minority at the pinnacle of our business pyramid and starts looking after the interests of the citizens in the street.