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Time For Investment In Competition: The $10-billion-dollar Plan To Reshape New Zealand
Auckland, 13 March 2025: Public policy group MonopolyWatch NZ today released a ten-plus-point programme of private investment initiatives required to fire up growth in the New Zealand economy and build infrastructure which functions in the interests of consumers and respects investors’ cost of capital.
- $1.5b investment in greenfield institutional supermarket operator
- $2b investment in NZ Fintech and Neo banks
- $1b investment in Hamilton Airport to initiate competition in airport services
- $2bn investment in electricity retailers and alternative providers
- $500m investment in breaking up the plasterboard cartel
- $1.5bn investment in greenfields OSM house assembly firms delivering high-quality entry-level at scale
- $500m investment in 2nd electrical distribution firm in Auckland
- $2bn in EV charging networks in sync with fuel distribution break ups
- $500m investment in 3rd domestic airline in to support regional growth and innovation
- $1bn investment in data centre redundancy for essential cloud services of the NZ Government and Defence agencies
- $1 bn in super yacht marina facilities
- $500m investment in breaking up Primary Healthcare Organisations (PHOs)
I. Supermarkets
Invest $1.5 billion brownfield investment in a third supermarket operator who initiates real price, nutrition and sustainability competition.
Reform needed:
The recent retail grocery market study (RGMS) by the Commerce Commission has highlighted that the vertically integrated cartels contribute to a lack of competitive wholesale grocery prices.[1] This is evident in regulated grocery retailers' wholesale (RGR) prices, which are often higher than their own retail prices.[2] This creates a high barrier for smaller independent retailers and new entrants as they cannot source a full range of products and brands at a competitive price. Furthermore, access to domestic capital proves to be a key roadblock in promoting competition. Northelia submitted opportunities to attract international investment with a capital raise of $1 billion – this has been updated to $1.5 billion in 2025.[3] All the while, Woolworths' ROACE is greater than the Commerce Commission's estimated WACC.[4] A structural breakup means investors could justify the investment in a third operator because the real barriers to entry are removed, and supermarket overbuilds are neutralised. Approximately 120 supermarkets and 2 DCs (with consideration given to geographical monopolies) would be sold in a process to a 3rd operator, enabling them the scale to start a comprehensive like-for-like build-out.
Outcome:
Lower food prices mean more competition for nutrition and more innovation for sustainability. After the erroneous 3:2 merger in 2006, the market has tipped into carefully planned geographical monopolies accompanied by unjustifiable prices of food when benchmarked against the rest of the CPI, especially when it comes to fruits and vegetables.
II. Capitalisation of FinTech’s and Neobanks
Invest $2 billion in establishing greenfield institutional start-ups to challenge the incumbents.
Reform needed:
Banks are prioritising profits over better outcomes for consumers.[5] As a result, New Zealand is about 10 years behind on international best practice standards, with innovation in technology falling behind most significantly, and consumers are frustrated with the level of service the big banks provide.[6] Despite this, ANZ recently defended their $2.1 billion in profit as “fair” and aligned with their cost of capital, with KPMG also reporting that the sector's net profit for 2024 was $7.22 billion.[7] Therefore, A breakdown of ANZ and ASB is required, as well as forced financing of Competitive Market solutions in a format similar to the UK’s Banking Competitive Remedies.[8] This would require incumbent banks to use some of the capital given to them during COVID-19 and the GFC to finance challengers, thereby preventing a windfall tax. The capitalisation of Kiwi bank is not the preferred pathway to igniting new technology and lowering banking costs.
Simultaneously to sorting out Kiwi bank , Neo Banks need to be capitalised , the Australian Banks are gaming the entire bank review process by confusing NZ politicians pretending FinTech’s are Neo Challenger banks .
Neo Banks need investment of circa $2bn, this will change NZ’s financial structure
Outcome:
A Lack of innovation in NZ’s finance sector is camouflaged by the extreme profitability of the big 4 Australian banks and their PR stories. NZ is 15 years behind its OECD peer group and runs the risk of having open banking controlled by the Aussie banks. An absolute lack of capital is pitiful, incumbent banks have $60bn of capital, and the FinTech’s less than $10m cumulatively Taxpayers have bailed out the big four banks - It's now time for neo banks to be capitalised correctly.
III. Auckland Airport
A $1 billion investment in Hamilton Airport will initiate competition in airport & tourism industry services. Including private jet facilities.
Reform needed:
Auckland Airport is an outrageous monopoly fracturing the NZ tourist industry and damaging aviation and tourism competition. Consequently, domestic air transport fees increased by 10.8% in 2024.[9] Furthermore, the Aviation Industry Association argued that Auckland Airport’s building plans were excessive, ultimately hitting travellers' pockets.[10] However, a new and improved motorway and electric car infrastructure in Hamilton increases the viability of a competitive facility
Outcome:
A bottleneck of monopolisation at the most crucial gateway to NZ. Consumers are sick of overpaying for a congested service, which has seen airlines and consumers fleeced on this must-have infrastructure. Investment is required to challenge Auckland Airport to provide better outcomes for consumers.
Rockstars, sport stars and billionaires are sick of the landing charges, poor service and landing slot queues in Auckland Airport for private aviation facilities.
These high end luxury facilities are a NZ disgrace and need to be upgraded and integrated with super Yacht and Chopper facilities to ensure NZ makes the most of its time zone and climate, in the northern hemisphere winter . High quality jobs, sustainability technology transfer and aspirational ideas are additional flow on benefits from this investment.
IV. Electricity Retail
$2 billion investment in electricity retailers and alternatives.
Reform needed:
Again, a heavily vertically integrated firm proves challenging for retailers and potential challengers. This is not just a problem for consumers but a significant deterrent of productivity.[11] The Electricity Authority’s review into electricity retail revealed that electricity hedge contracts were neither deep nor liquid, overexposing retailers to the risk of spot market price fluctuations.[12] An inevitable legislated break up of Gentailers will create substantial investment in new retailing systems, billing and electricity innovation. A target of $2bn (into challengers) is required.
Outcome:
New Zealand was a leader in deregulating the electricity market. Now, however, New Zealand consumers are suffering as the industry lags 15 years behind best practice in electricity usage and generation. New tech in solar, storage and EV charging means that investment in this area in challengers will fundamentally change the pathway forward. Ultimately, competition will drive down electricity prices and provide more innovation and choices for consumers.
V. Others
| Project | What reform is needed | Why and what the outcomes for Kiwi’s will be |
Secure $500m for breakup of plasterboard cartel Beach head building products in NZ are monopolised and contribute to the extremely low productivity of the important house building sector | Governments are continually lobbied by the building industry, its RMA, OIA, and council red tape, while outrageous monopolies extort monopoly rents and fracture social cohesion. New Zealand has the lowest productivity in the OECD in entry-level house construction. The government has the highest cost of building social houses anywhere in the world ( Kaianga Ora 2025 (* $11,250 per square metre in Meadowbank ). Outlaw rebates for operators with SMP Outlaw vertically integrated exclusive supply arrangements | Lower construction costs in entry level housing will have a profound impact on housing affordability and the pathway to healthy compliant homes , particularly on the gigantic task of double glazing the entire NZ housing stock and preparing for climate change impacts |
Secure $2bn in 3 OSM house building operators OSM ( Offsite Manufactured houses) | NZ is behind in the use of scale and automation in house construction (as illustrated in PM’s comment that Aussie builds at ½ costs of NZ). NZ house assembly business is dominated by cottage industry structures failing to scale up to use new supply chains and new technology – this means Kiwis pay approx. 4 times for the cost of a house build (excluding land). | Consumers in NZ pay too much for entry level house construction. A plan for entry level house construction costs to Half over the next decade needs to be published. Central government confronting the building industry will benefit consumers. The use of scale & international vertically integrated house assembly companies will cut construction costs by 50% for KO and consumers |
| Secure $500m for a second infrastructure electricity distribution company Opening up competition in energy distribution more formally, enabling competitors to build more infrastructure safely, will facilitate consumer benefits | A second operator status for Auckland’s Vector electric distribution facilities. Reform of the dysfunctional and vested interest governance of Vector will ensure more investment in EV charging, Solar , & lower connection charges for large cities | Decentralisation of energy production means consumers need an improved distribution network to account for the innovation in electricity generation. This will lead to lower prices and empowerment of Consumers This may facilitate the buying and selling electricity back to the grid from consumer households. |
| Finance and build new national network of branded fuel operators ComCom report on fuel distribution showed a market failure. | Some foodprint divestments should take place to facilitate a new energy supplier with real infrastructure in both electric charging and petrol distribution | There is room for a hybrid Petrol/ Electric distributor, currently there is a government initiative which could provide private funding. Prices will fall as competition becomes real |
| Attract a new nationwide Insurance Company $1bn | A new NZ state insurance vehicle needs to be capitalised after a market study into NZ insurance industry is completed and the recent impact of consolidation is reversed | This would result in lower premiums, greater access to insurance and better coverage underpinned by greater transparency. The Christchurch Earthquake has created profiteering by the Industry which has fractured consumer interests |
| Secure investment and operating skills for 3rd domestic Airline require | A new 3rd operator Airline is required to break up the “clubhouse “monopoly of Govt Owned, Air NZ in Domestic flights, which actively collaborates with Qantas owned Jetstar to maintain high prices and keep pricing high on major domestic routes . “Network effects” are exploited by Air NZ to ringfence viable competition- These network effects need to be neutralised by ComCom Intervention to facilitate competition. | This would lower prices for Kiwis. Consumers would benefit as growth pressure is removed from Auckland and traffic is removed from the regional “timetable Abuse “is illegal in most EU States, . Operators with Market Power are unable to match challengers’ schedules. roads |
| $500m investment in breaking up Primary Healthcare Organisations (PHOs) | Private equity-controlled Primary Healthcare Organisations (PHOs) operate geographic monopolies. They use government funding to purchase general practices and then compete against their own independently owned members. Over the last five years PHOs (often masquerading as charitable organisations) have taken an ever-increasing share of the funds targeted at general practices, spending more on administrative overheads and less on front-line services. | Removing non-contributing private equity from the primary healthcare equation will ensure a greater share of the funding intended to support General Practices goes directly to embattled local GPs, reducing economic stress, enabling them to continue practicing and improving patient outcomes. |
| Build 2 new NZ owned Data Centres | Its time for Data centre infrastructure to be reviewed by Central Government in the light of the rapidly evolving Geo Politics of the region and Undersea cable terrorism potentially impacting NZ data storage facilities in Scandinvan Vulnerability in this fast-evolving industry comes from
| NZ’s data sovereignty needs to ensure consumers are protected, and their services are priced appropriately. NZ reliant on undersea cables & satellites to maintain basic government service “breath” Plan B & plan C on this essential infrastructure needs to documented and financed |
| $1bn in superyacht Marina and servicing facilities | This environmentally friendly sustainable industry was pioneered by Kiwis, with NZ having world famous reputation. has an obvious advantage in time zone, southern hemisphere weather, access to pacific islands, Antarctica and geopolitical security. “Skippers , Captains, & Pilots “ often make the decisions on where the luxury industry holidays , this is an easy investment win for NZ . | NZ consumers benefit from the high-quality jobs, green technology innovation and high value luxury tourism. which is a spin off from this investment and enablement. Inevitably the Tax base expands because of engaging this well planned investment in integrated facilities. |
[1]Commerce Commission Grocery Market Study 2022. https://comcom.govt.nz/__data/assets/pdf_file/0024/278403/Market-Study-into-the-retail-grocery-sector-Final-report-8-March-2022.pdf
[2] OECD Competition in the Food Supply Chain – Contribution from New Zealand. https://one.oecd.org/document/DAF/COMP/GF/WD(2024)30/en/pdf
[3] Northelia “Submission on Market study into grocery sector draft report” (26 August 2021) at 2.
[4] As above, n 1.
[5] https://www.1news.co.nz/2024/03/21/banks-prioritising-profit-over-investment-in-tech-innovation/
[6] https://fintechnz.org.nz/2024/05/15/fintechnz-viewpoint/
[7] https://www.rnz.co.nz/news/top/544370/anz-defends-2-point-1b-profit-making-a-fair-return-for-our-shareholders and https://www.nzherald.co.nz/business/companies/banking-finance/nz-bank-profits-hit-72-billion-kpmg/GMLZCWYP7ZA7JC66A7ASAQM3C4/#google_vignette
[9] https://www.stats.govt.nz/news/prices-for-domestic-flights-and-accommodation-increase/
[10] https://www.nzherald.co.nz/business/companies/airlines/auckland-airport-under-fire-from-small-operators-for-grandiose-building-plans/4XK5PCPBWVFVZNOEZBKXAG4K4A/#google_vignette
[11] https://www.rnz.co.nz/news/business/535816/nz-s-electricity-market-a-problem-for-productivity-oecdl
[12] https://www.ea.govt.nz/news/press-release/review-identifies-risk-to-retail-electricity-competition/
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