Cabinet split scuppers competition reforms

By Richard Braddell

WELLINGTON - Long awaited reform of the weak competition provisions in the Commerce Act looks to be dead in the water.

The Government claims that it is still considering the matter but it is offering no time frame as to when legislation may be introduced into the House.

Delay will almost certainly be fatal since there are less than 20 sitting days before the election, leaving little time to shepherd changes through the legislative process.

In spite of the Government's equivocation, belief is widespread that the cabinet more or less agreed to the reforms that would lower the threshold for anti-competitive breaches at its meeting on July 12.

But while it appears there was majority support for bringing the Commerce Act closer to the less permissive Australian legislation, it is believed there was strong disagreement on wording between the Treasurer, Bill English, and the Enterprise and Commerce Minister, Max Bradford.

If so, the Government's programme for generic competition policy reform looks severely damaged since the remaining prong, stiffer penalties and remedies, depends on a beefed up capacity to catch transgressors to be effective.

This increases the risk of heavier dependence on industry-specific reform, such as that in electricity

The Government was questioned about the issue in Parliament yesterday with Labour finance spokesperson Michael Cullen asking if alleged representations to the Prime Minister by Telecom's chief executive, Dr Roderick Deane, had delayed the introduction of changes already approved by cabinet.

"The Government has had regular discussions and submissions on its proposals for change to the Commerce Act from companies and individuals up and down New Zealand including Dr Deane. All the views will be taken into account as the Government considers the matter," the deputy Prime Minister, Wyatt Creech, said on behalf of Prime Minister Jenny Shipley.

Responding to a further question from the Alliance leader, Jim Anderton, Mr Creech said Dr Deane had not been given access to proposed changes.

Later on, the Minister of Finance, Sir William Birch, said that while changes to the Commerce Act were still under consideration, the Government was committed to making some changes to various parts and they would be introduced for select committee consideration "in due course".