1. INTRODUCTION AND SUMMARY

1.1 This submission on the Commerce (Commerce Commission Reform) Amendment Bill (the Bill) is made by The New Zealand Initiative (the Initiative), a Wellington-based think tank supported primarily by major New Zealand businesses. The Initiative undertakes research that contributes to the development of sound public policies in New Zealand, advocating for a competitive, open, and dynamic economy and a free, prosperous, fair, and cohesive society. The views expressed in this submission are those of the author rather than the Initiative’s members.

1.2 The Initiative has advocated for governance reform of the Commerce Commission (the Commission) since 2018. We welcome the Bill. The Initiative has argued for the structural separation of the Commission’s governance and regulatory decision-making functions for more than eight years. The Government deserves credit for commissioning and acting on the findings of the Governance and Effectiveness Review of the Commerce Commission (the Rebstock Review).1

1.3 Our support for the Bill’s architecture does not extend to every design choice within it. Our research shows that three factors have a significant bearing on whether regulatory agencies perform well: internal governance arrangements, the quality of appointments, and external monitoring of their performance. On the first factor, the Bill delivers reform of real substance, though, as we argue below, one specific design choice preserves the core defect the reform is meant to eliminate. A board cannot independently oversee the people who sit on it and vote on its decisions. On the second and third factors, the Bill falls materially short. If those deficiencies are not addressed at the select committee stage, the risk is that structural reform produces a better-looking institution rather than a better-performing one.

1.4 In addition, the Bill creates a broad new general functions provision for the Commission in proposed section 11. The National-ACT coalition agreement (the Coalition Agreement) committed to reform market studies “to focus on reducing regulatory barriers to new entrants to drive competition.”2 The Initiative argued in its February 2026 submission to the Economic Development, Science and Innovation Committee on the companion Commerce (Promoting Competition and Other Matters) Amendment Bill (the Initiative’s February 2026 submission) that the Commission’s market study powers should be confined consistently with that commitment.3 Proposed section 11(1)(b) in this Bill cuts against the same commitment at the functional level and should be narrowed on the same principle.

1.5 In summary, the Initiative submits that Parliament should:

(a) Amend proposed sections 12 and 21 to prohibit any dual membership of the governance board and the Commissioner panel.

(b) Amend proposed sections 15 and 20 to require that at least three members of the commissioner panel have competition economics expertise, any regulatory committee dealing with matters under Parts 2, 3, or 3A of the Commerce Act includes at least two commissioners with that expertise, and the board conducts recruitment and makes a formal recommendation to the Minister before any commissioner is appointed.

(c) Establish an independent appointment agency to subject governance appointments to New Zealand’s regulatory agencies to independent scrutiny against published skills matrices, and amend the Bill to bring appointments to the Commerce Commission within the agency’s remit.

(d) Amend the Bill to require the Ministry of Regulation to conduct periodic reviews of the Commerce Commission’s regulatory strategies and performance, reporting to Parliament no less than once every three years, and extend this obligation by corresponding amendments to cover the Financial Markets Authority and the Reserve Bank of New Zealand.

(e) Amend proposed section 11(1)(b) so that the Commission’s review, study, and inquiry function is directed toward identifying whether existing regulatory, policy, and government procurement practices together effect a substantial lessening of competition, consistent with the coalition agreement commitment to focus market studies on reducing regulatory barriers to new entrants.

1 Dame Paula Rebstock, Professor Allan Fels AO and David Hunt, Governance and Effectiveness Review of the Commerce Commission: Recommendations Report (Wellington: Ministry of Business, Innovation and Employment, 13 June 2025).
2 National-ACT Coalition Agreement (24 November 2023), 4.
3 The New Zealand Initiative, "Submission to the Economic Development, Science and Innovation Committee on the Commerce (Promoting Competition and Other Matters) Amendment Bill" (12 February 2026).