Gas price drop means market study wastes $3m
The recent fall in petrol prices means the Government’s heavy-handed investigation into fuel companies will waste $1.5m of taxpayer money and will place similar compliance costs on the companies themselves, says ACT Leader David Seymour.
“Petrol prices have dropped by 30 cents a litre in some places as a result of a strong New Zealand dollar and increased U.S. supply of oil.
“But Commerce Minister Kris Faafoi and Commerce Commission Chairman Mark Berry confirmed today the $1.5m investigation will still go ahead.
“The Prime Minister has predetermined the outcome by saying consumers are being ‘fleeced’, showing market studies will be misused for political purposes.
“This investigation will cost fuel companies a similar amount of money to comply with.
“The Commerce Commission has admitted that a previous market study created two months’ full-time work for seven staff at one firm, with a government agency asking for 200,000 documents. Another investigation generated legal costs of $600,000 plus internal staff time for a second company.
“All up, the petrol market study will cost New Zealand around $3m – and for what?
“The real problem with New Zealand’s economy is a lack of scale to support more competitors. We live in a small, sparsely-populated country with fewer than five million people.
“New Zealand already has great difficulty with bureaucracy – too much red tape and regulation prevents us from raising productivity. Market studies are good politics but atrocious policy.”