Home > The Body Politic > The Politics of Power and a Very Clear Choice – Part Toru

The Politics of Power and a Very Clear Choice – Part Toru

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new zealand high electricity prices

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Continued from: The Politics of Power and a Very Clear Choice – Part Rua

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On a more Positive Note

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With all the scare-mongering from some quarters (National, right wing blogs, conservative media commentators), and naked threats of economic sabotage (JB Weir, Brian Gaynor, etc), there have been commentators with a more positive, up-beat assessment of the Green-Labour proposal for NZ Power.

Bernard Hickey wrote,

“But sometimes the sheer size of the profits becomes so obvious that it invites a backlash. The National Government realised the power-consuming public was nearing the end of its tether in 2008, so it acted to force more competition with its 2009 sector review and the very successful “Whatsmynumber”. It helped increase the switching rate over the past couple of years towards 20 per cent. Annual residential power price inflation halved from 8 per cent in the decade from 1998 to 2008 to 4 per cent since then.

But it is still running at quadruple the general inflation rate and it’s clear that “competition” hasn’t worked to reduce or even restrain power prices for voters, as opposed to businesses.

[…]

The SOE sales programme changed all that. It proposed handing those super profits to the richest New Zealanders in the form of shares and dividends.

That was the moment the Government and the industry crossed that red line and triggered the regulatory backlash promised this week by Labour and the Greens.”

Acknowledgement:  NZ Herald – Bernard Hickey: Power barons fail to fool the public this time around

Vector chief executive, Simon Mackenzie, seemed to agree,

The electricity policy announced by the Labour and Green parties could be made to work and the current debate is overly emotive, says the chief executive of the regulated monopoly electricity and gas network owner, Vector.

Simon Mackenzie told BusinessDesk he was encouraged by the fact the proposed central purchaser system would incentivise commercially rational investment in energy efficiency, and that the Opposition parties were not pursuing direct subsidies.

He also welcomed the fact Labour was proposing to simplify regulation of lines companies, which has become enmeshed in the courts after policies Labour implemented was “not tracking as was intended,” Mackenzie said.

There was “no perfect model” for electricity systems, and other countries used similar methods to set prices and to procure investment in new power plants as demand rises. At present, new generation is procured by competing generators identifying the “next least-cost” of new generation and deciding to build it.

[…]

“The model is used in other jurisdictions. It has its pros and cons. It’s made to work.”

Acknowledgement:  NZ Herald – Labour-Greens plan could work, says Vector CEO

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Inevitable Conclusions

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1. The term “Government-in-Waiting” is well known.

But there is a corollary to this concept.

The Green-Labour policy has not only put National on the “back foot” with the audacious nature of the plan – but has placed National Ministers – from John Key up – into a ‘No Man’s Land’ of a Government-in-Opposition role.

National finds itself faced with a policy that is so novel; so unforeseen; that their initial reactions were indignant splutterings of “North Korean school of politics”; candles; brown-outs; “United Soviet Socialist Republic of New Zealand” [sic]; threats of economic collapse; economic “sabotage”, and other doomsday scenarios.

The responses could be likened to the indignant temper-tantrums of a teenager who has been used to getting things all his/her life – and was suddenly being brought to heel by exasperated parents.

Key has said he never wants to be in Opposition again,

“I don’t think it suits me as a person. I’m not a negative person and a lot of Opposition is negative.”

Acknowledgement: NZ Herald – Key says he’ll quit politics if National loses election

Well, that is precisely where he now finds himself: the new quasi-Opposition in Parliament. The Green-Labour coalition is setting the agenda, and National can only react,

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Labour-Greens plan forces government to suspend MightyRiverPower offer, amend documents

Acknowledgement:  Sharechat – Labour-Greens plan forces government to suspend MightyRiverPower offer, amend documents

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2. On 20 April,  Labour finance spokesperson, David Parker, told  TV3′s The Nation,

It’s not like the money disappears from the economy, just that people have more money in their pockets. Instead of spending it on inflated power prices, they’re spending it somewhere else in the economy.”

Which is pretty much the rationale that National used to justify it’s fiscally irresponsible tax cuts in 2009 and 2010,

“In the short term, National’s tax package will give households confidence and some cash in their back pockets to keep the economy going and to pay down debt.”

Acknowledgement: National – Economy/Tax Policy

3. If New Zealanders could tick National in 2008 for their promised tax cuts (in 2009 and 2010, despite being unaffordable and demanding massive borrowings to fund) – then I’m sure as hell confident they’ll be ticking Labour and/or Green in 2014 (if not earlier) for cheaper electricity.

There is nothing as easy to sell to voters than giving them what was theirs in the first place. That applies equally, whether tax dollars or electricity.

Unlike the academic nature of who owns our State Assets – which for the poor underclasses means very little – everyone can understand a very simple concept of cheaper power.

Consider if those 800,000 missing-in-action,  non-voters were asked the simple question; do you want cheaper electricity?

If the answer is “yes” – they need only tick the box for Labour and/or Greens.

For the Nats: game over.

Continued at: The Politics of Power and a Very Clear Choice – Part Wha

This blogpost was first published on The Daily Blog on 26 April 2013.

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Previous Related Blogposts

History Lesson – Tahi – Electricity Sector “reforms”  (4 March 2012)

John Key: Man of Many Principles (28 Sept 2012)

Labour, Greens, NZ First, & Mana – A Bright Idea with electricity! (10 March 2013)

References

NZ History Online:  Dancing Cossacks political TV ad

NZPA: Splitting up ECNZ expected to cut wholesale power price (16 Dec 1998)

NZPA:  Reforms aimed at business – Luxton (21 April 1999)

Otago Daily Times: Power Prices Set To Soar (12 May 1999)

Otago Daily Times: No case for regulation (24 May 1999)

Otago Daily Times: Lower power prices coming says Bradford (3 June 1999)

Otago Daily Times: Power prices to rise by up to 15.1% (29 June 1999)

Otago Daily Times:  Reforms blamed for hike (13 July 1999)

Scoop: Alliance to hold Winston Peters accountable (8 Oct 1999)

NZ Herald: Peters ‘forgets’ NZ First support for power reforms (13 Aug 2008)

Fairfax: Government to seek inquiry into power price rise  (30 September 2008)

NZ Herald:  Put prices on hold, Brownlee tells power companies (21  May 2009)

NZ Herald: Mighty River directors’ 73pc pay rise realistic – Key (5 April 2013)

Scoop:  Labour-Greens to rip up the book on electricity pricing (18 April 2013)

NZ Herald:  Labour-Greens plan could work, says Vector CEO (19 April 2013)

NZ Herald:  National gobsmacked at Labour idea (19 April 2013)

NZ Herald: Power plan likened to Soviet era (19 April 2013)

NZ Herald: MRP chief slams socialist’ plan (21 April 2013)

TVNZ:  Q+A – Transcript of Steven Joyce interview (21 April 2013)

NZ Herald:  Bernard Hickey: Power barons fail to fool the public this time around (21 April 2013)

Radio NZ: Power prices nearly double since 2000 (21 April 2013)

Other blogs

Robert Guyton: Murray Kerr on MRP

Kiwiblog: Electricity Prices

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  1. 3 June 2013 at 1:20 pm

    These three blogs are the best you done yet frank.

    Puts the electricity situation in its place nicely.

    As you say a very real choice either inflated power prices for ever or We go labour greens and do something towards regulaing it.

    I know I am going greens next year thats for real.

    • 3 June 2013 at 4:29 pm

      Thanks for the compliement, Geoff.

      Yes, with MMP, the political marketplace has been de-regulated to such a degree that we can choose how far to the Left we want to vote.

      And the best thing about this “de-regulation”? It empowers voters, unlike economic de-regulation which increases poverty and dis-empowerment.

  2. 3 June 2013 at 1:22 pm

    * “Regulating”

  3. Mooloo magic
    3 June 2013 at 3:47 pm

    Another fine article Frank, your research is am amazing, you must spend hour preparing your articles.
    My worry is that the MSM has such a strong bias in favour of the government, that this government does not come under the scrutiny it should hence Key’s polling is still high.
    Just how long can Key and his henchmen/women get away with their outlandish lies? I’m still amazed a lot of Kiwis are still enamoured with Key despite his lack of honesty and integrity and his shonky deals with multi-national corporations.
    The failure of David Shearer to inspire the electorate is a worry and Labour still do not look like a government in waiting; it’s almost if the Labour caucus are content in being in Opposition.
    Another three years of National does not bare thinking about.
    The Greens seem to have more and better ideas then Labour ,perhaps the Labour Party is reaching the end of its life span as a major political party as to date Labour has been largely an ineffective Opposition. National should be toast for all its unpopular laws and scandals since it won the 2011 election yet Shearer is so ineffective that’s helps National to remain popular.
    I’m so frustrated to what is happening to our country by a government that believes in corporate welfare and screws the rest of us while the nice smiling Dear Leader pretends he is governing for all New Zealanders and we naïve meek Kiwis accept it.
    I have always voted Labour since I became eligible to vote in 1975 but I’ll need to see a big improvement if Labour is to retain my support in 2014.

    • 3 June 2013 at 4:43 pm

      Again, thanks Mooloo. (And yes, the research can take up an entire evening before I even start pounding away on the keyboard, writing it all up. It’s fascinating though – youi get to learn up on these issues…

      I think New Zealanders are slowly starting to notice Key’s tresorting to “brain fades” and mendacity. This story was in Wellington’s Dominion Post on Saturday; http://www.stuff.co.nz/national/politics/8743939/John-Key-takes-a-hit-in-integrity-stakes

      I understand your frustrations on Labour’s leadership. Perhaps Shearer’s shortcomings may be shored-up if the senior ranked MPs work as a strong team…

      Labour will require a very talented strategy team to make this work.

      On another plus-side, the Left is spoiled for choice with the Greens and the Mana Party. I’d like to see another Mana Party MP win representation, to give Hone Harawira some decent support in the House.

      As for Dear Leader, this may bring a smile to all our faces; http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10697623

  1. 3 June 2013 at 12:14 am
  2. 4 June 2013 at 12:10 am

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