Home > The Body Politic > It’s Official, The Sky Will Fall – Phil O’Reilly

It’s Official, The Sky Will Fall – Phil O’Reilly

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The sky is falling

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As the rightwing and their business foot-soldiers are continuing their mad panic (or more accurately, their mad attempts to panic the public) over the Labour-Green proposal for a single electricity buyer-desk, aka, NZ Power – the public have moved on.

Not that the right wing have noticed. Their fear-campaign is still cranking out all manner of garbage to strike the Fear Of Mammon into the hearts and minds of the Great Unwashed Masses.

Chief executive of BusinessNZ, Phil O’Reilly, had this op-ed piece published yesterday (30 April);

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NZ Power - electricity - Greens - Labour -  lower power electricity prices

Acknowledgment: Fairfax Media – More competition good for power sector

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After only the first paragraph, O’Reilly launches into a list of dire sky-is-falling list of Doomsday scenarios;

  1. Price controls harm investment.”
  2. New Zealand is dependent on overseas investment. Without it, home mortgages would become more expensive and harder to get…”
  3. New Zealand is dependent on overseas investment. Without it …  and more expensive to get investment to grow businesses and create jobs.”
  4. History shows that in places with price controls – the former Soviet Union, Venezuela, North Korea, or New Zealand under the Muldoon wage and price controls – the result is capital flight, run-down industries and poorer populations.”
  5. This threat also almost immediately destroyed millions of dollars of value built up by small investors in the NZ Superannuation Fund, KiwiSaver and private power companies.”
  6. Electricity prices must take into account the cost of building new generators – if they didn’t, we’d find the lights would go out the moment we exceeded our capacity.”

O’Reilly left out terrorist attacks, alien invasion, and God striking us down with thunderbolts.

Some of his rhetoric is so bizarre that you have to wonder if O’Reilly actually believes his own BS. Take for example this remark,

Electricity prices rise because a growing population and growing economy bring growing demand for power, and growth in demand requires investment in new generation plant, which is large-scale, long-lived and expensive to build.

Acknowledgment: IBID

O’Reilly then goes on to claim,

Much of the 64 per cent price rise under Labour resulted from interventionist policies.”

Acknowledgment: IBID

So if I have this straight; according to Mr O’Reilly, “Much of the 64 per cent price rise under Labour” is due toa growing population and growing economy bring growing demand for power”?!

Because that’s what he is implying;  growing population + economy = 64% in electricity price rises.

That’s utter bullshit.

The population of New Zealand grew from 3.8 million in January 2000 to our current 4.4 million. (See:   Trading Economics – New Zealand Population) That’s an increase of 600,000 – 15.8% (hopefully my math is correct on this calculation).  Somewhat short of the 64% that O’Reilly quotes.

As for suggesting that New Zealand’s economy grew by 64% during Labour’s term in office – as much as every left-winger  would love to acknowledge that – no. There has never been that degree of growth in New Zealand between 2000/08 or even 2000/13. Or any other decades;

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NZ GDP 2000 - 2008

Acknowledgment: Trading Economics – GDP Growth Rate

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After all the fear-mongering and name-calling, the only word left to describe O’Reilly’s piece is; laughable. His assertions are derisable; his “facts” are dubious and unsupported by evidence (ie; he’s made it up); and his fear-threat of more expensive mortages is  bogey-man stuff.

It may come as a shock to Mr O’Reilly – but whilst some of the public can be gullible, we are not that thick.

Nor do we willingly believe absurd claims like this,

Electricity prices must take into account the cost of building new generators – if they didn’t, we’d find the lights would go out the moment we exceeded our capacity.”

Acknowledgment: Fairfax Media – More competition good for power sector

Yes, we have had power cuts in the past. Usually due to low water storage in the dams; transmission line failure; or other equipment break-downs or shut-down for maintenance.

But let’s not forget the our entire past electricity generation infra-structure, such as Manapouri, Benmore,  Clyde Dam, etc,  were the  result of State  interventionist investment in energy infra-structure.

None of it was built by private enterprise in response to “consumer demand”. Private investment has been a relatively recent advent, such as Contact Energy’s Te Mihi development – a project, by the way that was under-taken during  Labour’s administration. (See: Te Mihi Power Station)

New Zealand has built up it’s energy infra-structure. We can do it again, when required. We most certainly did not rely on private enterprise.

But these are all “inconvenient facts” that the Right refuse to deal with – or even acknowledge. Right wingers like O’Reilly tend to re-write history in an Orwellian fashion, to suit their neo-liberal agenda.

Well, you can fool some of the people some of the time…

The associated poll with O’Reilly’s op-ed piece is hardly scientific, but as an indicator, it shows that people are waking up to the biggest con of the last thirty years of New Right “reforms”,

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More competition good for power sector  (2)

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Nearly two-thirds think that cheaper electricity is “about time”.

Just over a third want to “stick to what we’ve got”. Bloody National supporters – thick as two planks.

Well, I have a perfect solution to the demands for both groups;

  • Those 60.6% who want cheaper power can sign up to NZ Power, and recieve cheaper electricity through a single-desk buyer.
  • The remainder, 34.8%, can keep buying their electricity at “market” rates; paying whatever their powerco demands from them.

Both groups are catered for.

Those who want it, will get cheaper power.

National supporters (and we know who you are, you very thilly, thilly people) can keep getting gouged.

Choice is good, eh?

I’m happy.

This blogpost was first published on The Daily Blog on 3 May 2013.

Choice for everyone, eh?

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Additional

NZ Herald:  Lid blown on power price rort (3 Feb 2013)

NZ Herald:  The 30-year power price hike (3 Feb 2013)

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= fs =

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  1. 6 June 2013 at 8:23 am

    Great blog Frank. I will sign up for the cheaper elektrickety!

  2. 6 June 2013 at 12:39 pm

    Right on the button .

  3. Akldnut
    7 June 2013 at 12:04 am

    Me too

  4. Darwin
    7 June 2013 at 1:18 am

    Unbelievable that O’Reilly is so deeply wedded to his free market dogma that he wants to turn down cheaper electricity. The man is a deluded fool.

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