New Legislation to Boost Competition in Banking and Electricity Sectors

Minister Bayly emphasized the benefits of competitive markets, stating that they boost productivity, create job opportunities, and improve living standards.

Commerce and Consumer Affairs Minister Andrew Bayly has announced new legislation aimed at enhancing competition in key sectors such as banking and electricity. The proposed Customer and Product Data Bill, which had its first reading today, is a crucial step towards improving the regulation of digital markets in New Zealand.

Minister Bayly emphasized the benefits of competitive markets, stating that they boost productivity, create job opportunities, and improve living standards. He highlighted that a recent OECD report ranked New Zealand last for regulation of digital markets, underscoring the need for reform.

The Bill aims to support competition by laying the groundwork for 'open banking.' This initiative is designed to facilitate competition between innovative start-ups and traditional banks, offering greater choice to consumers and potentially leading to lower prices.

Bayly cited the example of Sharesies, a New Zealand-founded investment app that allows Australian customers to link their bank accounts, round up transactions, and invest the difference. This feature, which promotes micro-investing and savings, is currently not available in New Zealand due to the lack of a consumer data right that would allow secure sharing of information between banks and third parties.

The Bill also introduces 'open electricity,' which could lead to significant savings for households by simplifying the process of measuring power usage, comparing prices, and switching providers.

A key aspect of the legislation is its focus on data privacy. The Bill will establish improved data privacy standards and is supported by the Privacy Commissioner. It will be an opt-in system, meaning customers must provide explicit consent for their data to be shared.

Bayly noted that countries like Australia, the UK, and the EU have implemented or are in the process of implementing similar consumer data regimes. He called for New Zealand to align with these international standards to leverage the benefits of the modern digital economy.