Published in the National Business Review of 12 October 2007

The government's review of the Commerce Act is expected to produce bigger changes in the regulatory area than in mergers and acquisitions, Commerce Commission Chairman Paula Rebstock says.

She told a Wellington Chamber of Commerce business audience this week that the Commission and the Ministry of Economic Development had discussed how to implement the outcome of the review.

On mergers and acquisitions, she did not see any radical changes.

"The general provisions of the New Zealand law are in line with international best practice. We don't see big changes coming, maybe some fine tuning," she said.

Bigger changes were expected in the regulatory area. Chamber Chief Executive Charles Finny had criticised the "odd situation where we have a separate and different set of controls for the telecommunications sector and airports are exempt from the regulatory provisions of the Commerce Act altogether."

Ms Rebstock said that the Commission took the differences seriously and (with government) "we raise them whenever we have an opportunity."

"My own perspective is that it's early days in the evolution of New Zealand's regulatory framework. I do that we need to be mindful of the small size of New Zealand. It is costly to regulate.

There are six electricity distribution companies in Australia and 27 such companies in New Zealand. To regulate them all would be very costly (to the consumer).

"It was widely expected that all the lines companies would be regulated by now, but it hasn't happened. I think that's a good thing. Where we have threatened controls we have been able to get an agreement with the company.

She said that the best way to avoid regulation is to work within "the reasonable bounds of behaviour." Monopoly businesses should take note of what a regulated environment would look like, if they wish to avoid regulation.

Ms Rebstock said she was not a regulator who wanted to regulate simply because a monopoly was a monopoly. "