Editorial: Commerce Commission job cuts should cause concern as regulator role vital

The Government has directed all public sector agencies to cut costs. Photo / Mark Mitchell

Opinion

EDITORIAL

A leaked document outlining proposed job cuts at the Commerce Commission has raised concerns about the regulator’s ability to perform its core role to ensure markets work well and New Zealanders are better off.

It’s a concern all Kiwis should share, as the cost of living bites, unemployment rises and whole industries contract in the drive to find efficiencies.

The Commerce Commission regulates markets in New Zealand where there is little or no competition. This includes the grocery, dairy, telecommunications and fuel sectors, as well as gas pipelines and airports.

It’s also carried out a competition study into personal banking services, considered the merger application between NZME and Stuff, and has looked at complaints relating to private carparking companies.

The commission’s vision is a New Zealand where individuals are better off because markets work well. It describes itself as playing a “crucial role” in the protection of consumers.

But like every Government agency, the Independent Crown Entity has been asked to find cost-savings and is proposing to cut a number of roles.

The proposal sent to staff, seen by the Herald, shows a net 55 roles are set to be axed, some of which are vacant: 79 fulltime equivalent roles are proposed to go, with plans to add 24 new jobs in different teams.

Final decisions will be communicated to staff by June 13, and the implementation date will depend on those decisions. Roles on the chopping block include those in regulation in the grocery sector.

“We will continue to be a credible regulator for groceries but with a reduction in resourcing,” the document vows, confirming a proposal to disestablish a groceries compliance manager.

The document warned the commission would not be able to do all of the work it currently does with fewer staff.

“We will continue to focus on our core regulatory responsibilities and obligations,” staff were told. “We are not however going to be able to continue our current work,” it reads, further stating that “robust prioritisation” needs to be agreed upon by its board.

A Commerce Commission staffer, who wanted to remain anonymous, told the Herald: “I understand the cost cuts are unavoidable but the current proposal has been applied disproportionately across the commission and would definitely affect our ability to perform our core roles as a regulator.”

Labour’s Commerce and Consumer Affairs spokesperson Arena Williams said the leaked document shows staff cuts will reduce the commission’s ability to do its current work to ensure the supermarket duopoly is lowering costs for shoppers and food producers.

She called food costs in 2024 “out of control”.

Minister of Commerce and Consumer Affairs Andrew Bayly said battling inflation and bringing down the cost of living for Kiwis remains the Government’s number one priority and said the proposed changes at the commission are small relative to recent growth.

”I have made it clear my expectation that the changes do not affect the commission’s critical function of regulating market competition, including in the grocery sector.”

That expectation from the Government may well be clear, but prioritising where the commission focuses its reduced resource will be a challenge as the agency faces its own economic headwinds. It will be a fine balance to ensure it monitors the right markets for the best pay-off for struggling Kiwis.

Cost pressures drive people to seek alternatives, to look for competitive offers, to try something new in the hope of saving some money. If New Zealand needs anything over the coming months, it’s more oversight of the markets the commission regulates, not less.

In a time of financial difficulty, the Commerce Commission’s regulatory role is more important than ever, ensuring consumers are protected and getting a fair deal. Without close monitoring, the commission’s vision of New Zealanders being better off will become nothing more than a slogan.