Watch: Nicola Willis talks supermarket competition as economic forum kicks off

The Economic Growth Minister is targeting increasing competition in the banking, grocery, and electricity sectors as a major piece of work for the government to address this year.

Speaking at the opening of the two-day New Zealand Economics Forum in Hamilton, Nicola Willis spelled out the findings of a 2022 Commerce Commission report showing "competition between grocery retailers is muted, profits are high, product ranges are limited and shoppers pay higher prices than people in many other countries".

Willis also noted New Zealand supermarkets were the most expensive for kitchen staples compared with the UK, Ireland, and Australia.

While she used her speech on Thursday to strongly signal how the government might get shoppers a "fairer deal", no announcements or immediate changes have been made.

Willis did, however, rule out the government opening its own grocery chain.

"There will be no KiwiShop. Instead I'd like to see another competitor enter the supermarket scene to disrupt the major players, drive down prices and increase options for Kiwi shoppers."

Some of the barriers that could be removed to encourage competition are regulatory hurdles in the Overseas Invetment Act and the Resource Management Act, helping competitors access suitable land and properties for development, and cracking down on predatory pricing and ensuring fair access to products.

Willis said increased competition also requires strengthening the Grocery Supply Code and introducing a Wholesale Code "to enhance access for smaller retailers".

Commerce Minister Andrew Bayly has started some work on that but nothing has yet been confirmed.

Willis is also reviewing the government's procurement rules so small and medium-sized businesses get a better chance at securing agency contracts.

"Small and medium-sized businesses say that too often they can't effectively bid for Government contracts because of the complexity of official procurement processes.

"I am reviewing the government procurement rules that cause this and will soon be recommending changes to Cabinet," she said.

In addition Willis is also considering a range of options around tax settings.

In the energy sector Willis says spiking prices and uncertain supply "are also a major barrier to industry and the jobs it supports".

"The Energy Competition Task Force has published proposals to give consumers more control over energy costs. In addition, independent reviewers will report to Ministers in the middle of the year on the performance of the energy market.

"My view is that the world's surging demand for renewable energy has changed the game. It's time to think much more boldly about the actions the Government may need to take to incentivise new generation, security of supply and affordable electricity," she said.

The other component Willis discussed on Thursday was how well KiwiSaver is working for New Zealanders.

"I want to see KiwiSaver balances grow, both to make Kiwis better off in retirement and to grow our collective national savings.

"I am taking advice on options for achieving that with a view to taking recommendations to Cabinet," Willis said.

Govt 'can't force' third supermarket entrant

Speaking to media after her speech, Willis recognised that breaking the duopoly would require people with private capital taking a risk.

"I can't force a third entrant in. I can't promise that to New Zealand. All I can do is open my arms as wide as possible to say you are really, really welcome and we want to work with you," she said.

Willis revealed there had already been at least one unsolicited proposal to the National Infrastructure Funding and Financing Unit, as well as some New Zealand interest from investors wanting to partner with an international supermarket chain.

But she would not disclose details, citing commercial interests.

She said work the government did to allow a third entrant to enter the market would be bespoke to that entrant.

"If someone wants to enter our market, they look at it and say 'that's risky, will I be able to get a resource consent, will I get overseas investment approval, will there actually be a site I can get developed, will I get tied up in court with vexatious litigation, is this actually a goer?' So my view is let's reduce that risk by working alongside potential third entrants."

Energy sector, Trump administration to be discussed

Former Australian Prime Minister Scott Morrison was to reflect on his leadership as one of the keynote speakers at the two-day forum.

Former ministers Tim Groser, Murray McCully, Anne Tolley, Nanaia Mahuta and James Shaw will all join various panels in their specialist areas.

Issues including the revolution of gene-editing technologies, the impact of a Trump administration on New Zealand and the Pacific, and the energy sector transition will be debated.

There will also be a monetary policy debate with economists Brad Olsen, Sharon Zollner and Nick Tuffley, and a session will be held on Thursday afternoon looking at the review of the university sector.

Treasury Secretary Iain Rennie will open the forum on Friday morning, followed by panels discussing Pharmac medicines and whether New Zealand schools are delivering the best environment for the next generation.

Morrison will share his thoughts on decision-making during constrained times in a fireside chat on Thursday evening.

The forum wraps up on Friday.

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