Source: Radio New Zealand
RNZ / Alexander Robertson
The Commerce Commission says work is underway to introduce stronger sector-specific regulation to improve competition in some critical industries.
The commission’s first State of Competition report provides an evidence‑based assessment of how competition was working across New Zealand’s economy, indicating a need for increased oversight.
Commission chair Dr John Small said competitive pressure had weakened in many parts of the economy.
He said the competition report suggests market conditions favoured larger incumbent businesses, particularly in electricity, gas, water and waste services, as well as financial and insurance services.
“Weak competition in these markets can mean higher costs and lower-quality services cascade through to businesses and households, increasing the prices people pay for everyday goods and services,” he said.
“That’s why work already underway to promote stronger regulatory settings and more effective competition is so important.”
Size matters
Small said there was value in promoting competitive opportunities for a wider range of businesses, particularly for smaller and newer firms that appear to be facing greater barriers to growth.
“While smaller, newer businesses may be able to enter markets, it is harder for them to displace the established players.
“When competition weakens, innovation slows, costs rise, and consumers pay the price. A competitive environment enabling small businesses to grow is essential for productivity and long-term growth.”
He said the report was grounded in domestic data*, though the findings aligned with international trends, pointing to OECD reports indicating evidence of weakening competition across many advanced economies since 2000.
“Competition agencies around the world are increasingly balancing law enforcement with more active tools, including access, inter-operability and non-discrimination requirements,” Small said.
“This reflects a broader shift in how competition policy is applied in practice, including in response to the challenges of digital innovation and more complex markets.”
In light of these challenges, he said the report was an important step in building the evidence-base needed to promote fair, dynamic, and competitive markets.
“As a diagnostic tool, it highlights where system‑level settings may need attention, and where competition settings may need to evolve as markets change, alongside the commission’s ongoing regulatory and enforcement work.”
*The report drew on data from individual businesses held by Stats NZ over a period of 22 years (2001-23), though was limited to businesses that interact with the New Zealand tax system.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand