What is stopping competition in New Zealand?
As New Zealanders grapple with the cost of everyday essentials, from the supermarket checkout to power bills and bank fees, pressure is growing to address weak competition in critical sectors. Rebalancing Markets: Competition, power, and a fair economy, hosted by Business School research centre Juncture: Dialogues on Inclusive Capitalism, saw experts in regulation, energy, consumer behaviour, law and economics examine why competition remains weak and what could help rebalance the system. The discussion comes as the Commerce Commission’s latest report on the state of competition in New Zealand suggests market conditions favour larger established businesses, making it harder for smaller and newer firms to displace these dominant players. Electricity, gas, water, and waste services, and financial and insurance services were identified as the areas most lacking competitive pressure. The Commission’s Deputy Chief Executive Raj Krishnan brought insights from the competition and consumer watchdog to the panel discussion. Another panellist, Business School alumnus Tex Edwards, the founder of independent public policy and research group Monopoly Watch, and telecommunications company 2degrees, says the Commerce Commission has clearly identified the country’s competition problems. “Parliament must arm the Commerce Commission with the powers, and protect it from lobbyists, so the evidence can be translated into lower prices, more choices, and a fairer economy.” Dr Eric Crampton, chief economist at the New Zealand Initiative and adjunct senior fellow at the University of Canterbury, says too often, governments create the market power they later condemn. “District plans often have rules banning new supermarkets in particular locations, and consenting processes that force entrants to prove they will not compete with established businesses,” he says. “When markets are open, underperformance by established players becomes an opportunity for entrants and better service for consumers. When entry is blocked by law, regulation, planning, licensing or procurement, market power becomes entrenched.” Dr […]
