Minister of Commerce and Consumer Affairs Kris Faafoi. Photo / Supplied
My plan for the Commerce and Consumer Affairs portfolio has a broad focus across areas that cover a cross-section of society and the economy, writes Kris Faafoi.
I will focus my energy in areas that can have an impact on everyday New Zealanders, especially the more vulnerable members of society. Consumers need to have the tools and information to make wise, motivated and informed decisions, whether it be making sure that consumers are investing in the appropriate KiwiSaver fund or are taking out insurance to cover themselves in the event of unforeseen circumstances. However, I also want to see that markets are operating efficiently, business confidence is high and regulatory settings are well-managed.
As Minister of Commerce and Consumer Affairs, I have a number of measures in train that will help us support honest business and benefit consumers.
Within the ambitious competition law reform programme, I am progressing the Commerce Amendment Bill in order to give the Commerce Commission the ability to undertake market studies.
Market studies provide an important source of information about how a market is functioning.
These studies allow us to identify whether there are factors in a market that are standing in the way of healthy competition and harming consumers.
For example, they will allow the Government to determine if small businesses are unfairly being shut out of markets by big players. These reports can then be used by the Government to decide if any legislation or other interventions are required to improve outcomes for New Zealand consumers and businesses.
These studies are not designed to give the commission 'fishing expedition' powers and I am confident there are enough checks and balances in the legislation to ensure that the information gathering is solely in the public interest.
I have also progressed the Labour Party's manifesto promise to criminalise cartels, which was also raised by New Zealand First. Price-fixing and other cartel conduct harms honest New Zealand business and I believe the risk of imprisonment acts as a strong deterrent.
This Bill was introduced to the house in February, and will be reported back late this year.
Another manifesto commitment was to deliver changes to Section 36 of the Commerce Act. Section 36 is New Zealand's prohibition against misusing market power. It is intended to prevent larger businesses from unfairly using their market power to harm competitors, including small businesses. This section is in need of reform as it is not currently effective at preventing anti-competitive conduct. The Government will consult on changing section 36 to prohibit any conduct by large firms that is anticompetitive, rather than relying on a complicated 'counter-factual' test as at present. This will ensure that smaller firms are not unfairly harmed by larger firms seeking to compete unfairly.
Other initiatives I have under way include the long awaited Financial Services Legislation Amendment Bill. The FSLAB aims to ensure more Kiwis are able to access good quality financial advice. Regardless of how a consumer chooses to access financial advice, the new requirements will provide reassurance that the advice is sound and their interests are being put first. My hope is that over time the changes that we make will increase consumers' trust in the financial services industry and lift their ability to manage and future-proof their finances.
Work is also progressing to protect the international reputation of New Zealand companies and the regulatory system that supports productive business.
New Zealand companies are generally highly respected and trusted internationally.
This is supported by the New Zealand company registration system, which is well regarded and seeks to balance the ease of doing business with transparency and high integrity.
However, in the wake of the Panama papers scandal and the London Anti-Corruption Summit, I want to assess whether there is a need for improved access to information about the beneficial ownership of New Zealand registered companies and limited partnerships.
There is an international trend towards increasing transparency of beneficial ownership and I think it is important that we also consider it here in New Zealand.
I want to explore the ways in which we can improve the transparency and integrity of beneficial ownership systems in New Zealand.
Additionally, I am concerned about evidence suggesting offshore-controlled entities have been "free-riding" off New Zealand's reputation for sound financial markets regulation by using their registration to imply that they are actively regulated in New Zealand when that is not the case. I want feedback on the proposals that aim to address this unscrupulous behaviour.
A discussion paper has been realised for public consultation outlining proposed regulations to support measures in the Bill to address the misuse of the Financial Service Providers Register.
Finally, in the competition space of my portfolio there is an ongoing programme of improvements underway to the securities regime including changes made under the Financial Markets Conduct Act to ensure we are delivering fair, efficient and transparent markets for business and consumers.
Business can be assured however that as a Government we are committed to ensuring an honest environment where consumer needs are met and business competitors are treated fairly.
In the next few months we will see several important milestones in the Consumer space too. My intentions for the introduction of Credit Contracts and Consumer Finance Amendment Bill, is to provide better protections for New Zealanders subject to predatory practices including inappropriate lending and debt collection practices.
We are working on specific measures to address wheel clamping and ticket scalping/scamming, because we know that these have been left unabated and have been difficult for the increasing number of New Zealanders who have fallen victim in recent years.
While these improvements may not be directly supporting business, they are supporting consumers.
And consumers with confidence, living good lives and being free from undue financial stress is in all our interests. Growing consumer and public confidence is justified given the outcomes this Government is delivering: fixing the long-term problems we have is crucial if we are to build a better future.
Well-functioning markets are in all our interests: good conduct and regulation leads to good outcomes for business and consumers.
This Coalition Government has a vision for a successful New Zealand that is built on an inclusive economy, fiscal responsibility and providing certainty. Currently, New Zealand's economy is in a strong position. However we believe that we could do better. While GDP growth is important in driving economic prosperity, we need to ensure that all New Zealanders are included in this picture. If we fail to be an inclusive economy, we risk leaving behind whole sections of society or building an economy that is environmentally unsustainable for future generations.
We need an economy able to deliver shared prosperity and sustainable economic growth. Critical public services like health and education are the foundations of a growing economy — they keep us strong and help us to prepare for the future. Being responsible with our public services means we are being responsible in an economic sense as well.
This is why we are dedicated to being fiscally responsible by running surpluses and keeping to the Budget responsibility rules.
Of course, making improvements is not just about spending money — it's about doing things differently. We are committed to working with the business sector on growing this economy, to deliver shared prosperity for all. The Commerce and Consumer Affairs portfolio plays a vital role in realising this vision by creating settings that contribute to well-functioning capital markets. Capital markets help facilitate businesses accessing the capital they need to grow, manage and price risk as well as provide investment opportunities for investors.
This will be supported by the Government's first budget where you will see a clear plan to build a better economy with accelerated investment in transport projects and other infrastructure. Within our plan for delivering economic growth, the Government will maintain surpluses and reduce net debt as a proportion of GDP. We are committed to living within our means and creating an economy with more jobs and better wages to lift the financial capability of New Zealanders.
● Kris Faafoi is Minister of Commerce and Consumer Affairs.
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