New Zealanders of the year: Paula Rebstock

By Claire Harvey

At the South Auckland Maori radio office where she is a volunteer accountant, Paula Rebstock is the nice lady who comes in to do the books. To executives around the country, she's the aggressive Commerce Commission chair who sends investigators to rifle through their rubbish-bins. To politicians, she's often a source of irritation, frequently standing in the way of policy plans or prompting cries of agony from the industries she is in charge of refereeing.

But when builders working in her street stop to say "thanks", Rebstock knows her fierce pursuit of anti-competitive businesses is making a difference to the people whose opinion she really counts: New Zealanders.

"At the airport the other day six people wanted to talk to me about power prices - that's very pleasing because we really want people to understand why we're doing all this, to understand why we care."

Fearless, confrontational and controversial, Montana-born Rebstock, 49, has brought the commission - which regulates competition and fair trading in the economy - a new reputation for pursuing the interests of everyday consumers.

This year, the commission has taken on some of New Zealand's most powerful interests (banks, power companies, telecommunications firms, wood preservative companies - hence the builders' delight), decrying price-fixing cartels and bully-boy monopolies, and publicly ticking off transgressors (for example, threatening to strip power companies Vector, Unison and Transpower of the right to set their own prices).

Rebstock has won enthusiastic support from the High Court, with judges forcing several major companies to pay record penalties of up to $3.6 million (and, in the case of ANZ Bank, to refund customers $10 million in overcharged fees). Rebstock has also introduced a new climate of leniency, offering immunity from prosecution to businesses who blow the whistle on price-fixing and other breaches.

"It's been a good year," says Rebstock in her office on Wellington's the Terrace - which is in Vector House. Yes, that's the same Vector which Rebstock has loudly accused of abusing its monopoly power by overcharging some customers. It's nice and cosy, Wellington; just across the road is Infratil (slugged with a record $1.1 million penalty over an unauthorised merger), ANZ is a few minutes' walk away, and Transpower is up the hill.

It makes for some awkward lift moments, especially because two of the three Vector House lifts are broken, forcing tenants to squash together like penguins. "It's been like this for six months," Rebstock says with a grimace, after discussing how she wants New Zealanders to become more aware of their consumer rights. "Ask me if I've complained about it," she says. Okay then, I say, have you complained? "Oooh, yes. Several times."

Adjusting to New Zealanders' reticence to complain was one of the first challenges for Rebstock when she arrived in Auckland 20 years ago with German-born husband Ulf Schoefisch, formerly Deutsche Bank's chief economist and now an independent consultant.

"In America, people were not at all shy about letting their feelings be known if a product or service wasn't satisfactory," Rebstock says. New Zealanders tend to make their displeasure known in "more subtle ways, but the flipside to that is that New Zealanders are extremely tolerant people, which is one of the traits that makes living here so fantastic.

"I value that so much that I'd never want New Zealanders to change, but I hope that our doing this job can give consumers more confidence."

The couple met when both were studying at the London School of Economics. They were set to take up high-powered money jobs in New York in the late 1980s, but decided on New Zealand instead.

"We were looking for a change of lifestyle; it was a conscious decision to opt out of that high-stress world, to come to a smaller place. We didn't quite realise exactly how small New Zealand was, though - when we were on the plane I was reading a book which said the population was three-point-something million. I showed my husband and we both thought it must be a misprint. We happily agreed with each other that in fact it must be 30-something million."

Less stress? It sounds ridiculous when you consider Rebstock's life - commuting from home on Auckland's North Shore to Wellington every Monday, working early and late all week, flying back on Thursdays, trying to spare time for weekend trips to Northland or the Coromandel on the family boat, working voluntarily at Urban Maori Authority Broadcasting with her close friend June Jackson.

She also squeezes in rushed mid-week trips home when required as mother of two teenage girls (one of whom, she notes with pride, has spent several years as a highly competitive gymnast). "They really are Kiwis, and they identify so strongly with New Zealand; they have a real sense of patriotism and attachment to New Zealand that I think is characteristic of the younger generation."

None of her work is making her popular with the business sector. Various money types describe her public accusations about cartels and monopolies as "bewildering", "far too aggressive", "extraordinary", and "driven by some kind of leftie agenda to redistribute wealth" in the economy.

"She is staunch," says David Russell of the Consumers Institute. After years of being perceived as ineffectual, finally "the Commerce Commission has shown itself, under Paula, to be prepared to make the hard calls and not to back away, even when they come under pressure from politicians, and even when their decisions aren't implemented," Russell says.

And for all the complaints from business, Rebstock has not invited the media to raids as Australian regulator Allan Fels famously did throughout the 1990s. "At least she's not quite as bad as Fels," several businesspeople told me morosely; but Rebstock says it would be "completely inappropriate" to turn search-warrant raids into media stunts.

"Anyway, that sort of [search] is usually at the beginning of an investigation, so it's hardly in our interests to let everyone know." She does point out, with surprised disapproval, that her investigators have found evidence hidden among Christmas decorations and inside beer fridges.

"As a Joe Blow consumer, it's jolly time we had a tougher enforcement of competition law," says Otago University's Associate Professor Rex Ahdar, a competition law expert. "Maybe we needed an American to do it, coming from that tradition of a much more aggressive anti-trust climate."

First appointed for a three-year term as chair in 2003, Rebstock is awaiting a Government announcement - as soon as next week - on whether she will be reappointed. Ministers have expressed disquiet at some commission actions (like rejecting the Air New Zealand-Qantas merger and the pursuit of Vector) but some observers say there are also hints that the Beehive finds it convenient to play good cop to the commission's bad cop when business complains about excessive scrutiny - and that means Rebstock's tough style might suit the Government nicely. "Paula has the strength of character not to be intimidated," says Russell.

Rebstock has a growing reputation as a terrifying inquisitor at commission hearings. "It's like mud-wrestling; no rules, no rights for participants, and people can come out feeling rather bruised by Paula's style, like they've been beaten up," says one insider.

Big business is deeply unimpressed with the commission's "sheriff-like behaviour" and Rebstock's tough language, says Business Roundtable chief executive Roger Kerr.

"There's been much too much aggressive posturing on the part of the commission and quite dubious actions in the form of seizure of firms' documents. It's extraordinary," says Kerr, adding the commission seems to believe its role is to redistribute wealth evenly in the economy - rather than simply promoting economic efficiency.

Kerr, who has known Rebstock since she worked in the Prime Minister's Department and Treasury in the 1980s and 90s, says she seems to have suddenly morphed from mild to headkicker.

"She is perfectly satisfactory to deal with and we've had some meetings at her initiative to talk about things - so I find it a little bit hard to square Paula, the rational economist who you can talk to on these matters with her activist behaviour."

Rebstock might be a stern regulator, but she wants business to know she is on their side - after all, she says, most of the "thousands and thousands" of complaints to the commission come from businesspeople whose shops or companies are suffering under high prices or monopoly conduct.

"I never lose sight that all the benefits of our society derive from the activities of the business community. You have to value that, and if you don't value it you've no business being in this job. The free market economy is a great way to allocate the country's resource, but to make sure the benefits flow through to everyone, you have to have competition."

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