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NZ Power and the next step

Written By: - Date published: 7:43 pm, April 18th, 2013 - 54 comments
Categories: capitalism, Economy - Tags:

First let me say that the NZ Power policy is some of the best progressive policy I’ve seen for a long time – it’s so good to see a real move to break with the Chicago School consensus. And it’s good to see the right caught off guard and resorting to showing the ugly abusive face they usually keep in check. Remember, in politics losing your cool is losing.

But let’s also be clear that this is a policy that threatens to transfer wealth from the elite to the people and, once they gather themselves, the elite will come after this policy hard. Not only to stop NZ Power, but because they know that if it gains traction then it might embolden the electorate to embrace other social democratic policies.

I’d bet a years worth of NZ Power savings that we’ll see some very well financed campaigns against this policy and against Labour over the next few months that focus on their “BAD ECONOMICS!!!” and lots of stern talking tos by a variety of serious-men-in-suits-who-know-better-than-we-do (BAD ECONOMICS!!!).

I think that Labour and the Greens will stand strong, and I think that activists will help them to push back hard. This is a vital policy and we need to make sure the next steps toward getting it in place are as strong as the one that was taken today.

54 comments on “NZ Power and the next step”

  1. karol 1

    And with the PM’s increasing consolidation of the intelligence services, legalising the surveillance of Kiwis.

    How will this policy play with the NAct push for the TPP?

  2. Gashead 2

    Power to the people… at last!

  3. Colonial Viper 3

    To the Labour caucus economics team – well bloody done. As for the next steps in electricity industry reform… ;)

  4. Saarbo 4

    You are spot on IB, we are going to see that term “Bad Economics” being quoted a lot in the next week.

    I’ll tell you what “bad economics” is: when your businesses monthly Electricity Expense goes from $400k go $2m, so you have to shed capacity and drop export sales to Asia. The consequential super normal profits made by the companies provide their CEO’s with super normal bonuses and the government with super normal dividends. I’m buggered if I know how that equates to “good economics” but that is exactly what happened under our existing electricity market structure.

    This is a great policy, it should have happened 10 years ago!

  5. emergency mike 5

    Oh noes not economic policy for the good of the majority instead of a wealthy minority in contradiction to the prevailing neo-liberal policy which is failing spectacularly all over the world bad economics!

    Sounds like a threat to the elite our economy to me, best issue spying warrants to the GCSB on anyone who supports it.

  6. karol 6

    And I still think Labour needs a more dynamic, politically savvy leader to front their part of the policy. And being an overtly committed left winger would help, too.

    And what will be the role of the unions in “standing strong” behind this policy?

    • Matt 6.1

      “And I still think Labour needs a more dynamic, politically savvy leader to front their part of the policy”

      Gee, ya think? It’s going to take a lot more than one good idea to turn Labour around.

  7. outofbed 7

    Well Done
    About fucking time.
    Hats off to Russel and Shearer Let us share the good news wide and far

    I wonder how much Contact will donate to the Nats election campaign?

  8. insider 8

    i call bullshit on that. the only reason your bill did that was because you played the spot market and thought you were being clever by taking what you thought was a sure thing. you could have hedged, you could have fixed your price but you gambled and lost. you deserve about as much sympathy as a money trader on the wrong side of a swap

    • insider 8.1

      that was a response to saarbo

    • Saarbo 8.2

      Insider: Are you suggesting that A)I am bullshitting, or B) suggesting that NZ’s 3rd largest Corporate (at the time) fucked up its hedging policy?

      Your are out of line suggesting A) but you may be right regarding B) But in the end of the day, the great free market sent prices through the roof, killing profitability. Why should you have to use financial instruments to deal with a fucked up market mechanism?

      This Greens/Labour policy should have been implemented 10 years ago.

  9. Draco T Bastard 9

    But let’s also be clear that this is a policy that threatens the transfer of wealth from the elite to the people…

    I take it that was a typo and that it’s backwards?

  10. insider 10

    this policy will be great for incumbant powercos. no bureaucrat will be able to accurately assess cost in a timely way and producers will be gifted a risk free return because of the information imbalance and ministers run scared that the lights will in out. profits will boom.

  11. geoff 11

    Why not nationalise completely and do away with the fake-market system altogether?

    • insider 11.1

      wouldn’t it just be quicker and easier to just give every consumer a $300 rebate?

      • McFlock 11.1.1

        If that were the sole objective of the policy, that question might warrant discussion.
        If.

        • insider 11.1.1.1

          Have you read Labour’s press release? what bit of that is not about price cuts? and to quote Gareth Hughes: “As you might have caught we have (alongside Labour) announced a plan to cut excessive profits from the Electricity Sector and return the money to households.”

          But you are right. The main objectives is to buy votes again

          • felix 11.1.1.1.1

            Why should we subsidise the profits of power companies by paying their customers so they afford to keep consuming?

            Fuck that insider. Let’s just do away with the whole model and get these privateers off our backs.

            • insider 11.1.1.1.1.1

              Anyone can generate power and do so pretty easily. How do you subsidise power company profits and what makes you feel so constrained to do so?

              • Your suggestion was a $300 subsidy, which while delivered to consumers, will be immediately paid forward to the power companies. Power companies would most likely raise prices to eat up the subsidy over time, so it would become useless. Having a single buyer will prevent them from doing that.

                • Colonial Viper

                  Correct. No point the government diverting tax payers money into a $300 power retailers subsidy.

                • felix

                  Yep, it’s a subsidy in the same way that WfF is a subsidy to low-wage employers.

          • McFlock 11.1.1.1.2

            These little windows into the toriverse are always fascinating.

            Is the problem the current power price, resolvable by your annual rebate? No. The problem is the constant and disproportionate inflation in power prices.
            Your rebate would need to be increased every year.
            The only real solution would be to change the system that creates the constantly increasing power prices.

            The government is supposed to help the people. That’s democracy. The trouble for you is that you’re so conditioned to business buying the government that you are unfamiliar with the idea of democracy.

            • insider 11.1.1.1.2.1

              the policy is guaranteeing a return on capital. What would you do in that situation? I’d overinvest because the government is guaranteeing my profit and the more I spend the more I get. increasing every year as the value of capital increases. The same thing has happened time and again in NZ and overseas. Who will pay? We will. More every year. who will gain most? the capitalists you loathe who will be counting their risk free rewards.

              The trouble with you and most standardistas, you’re so conditioned by class envy and a strong desire to spend other people’s money that you don’t get cause and effect.

              • McFlock

                This from the guy who suggested a $300/year rebate in a market that already has disproportionately increasing charges.

                • insider

                  I’m sorry for you and your irony bypass. it’s an unfortunate side effect of leftism. It’s not permanent though

                  • McFlock

                    Look up “irony” in the dictionary. Contrast with “sarcasm”.

                    Were you being “ironic” suggesting an idiotic rebate, or when you pretend that a sole purchaser means a purchase frenzy by speculators?
                    Aren’t you forgetting that the size of the reward is also part of the investment decision, not just the amount of risk?

                    Although nationalisation of the entire supply chain in areas of critical national infrastructure has always been my personal preference.

              • jps

                You’re assuming that the social monoposonist will be willing to accept all offers of supply. Why would it do that?

      • Draco T Bastard 11.1.2

        Nope because that would leave the wealth transfer system in place that takes from the poor and gives to the rich.

    • Michael Valley 11.2

      because that way you would have to come up with billions to buy out the Trustpower and Contact (and Mighty River…) shareholders.

      • geoff 11.2.1

        Not if you change the way the SOE gentailers value themselves. Change the accounting rules so they have to write down their value and then pay a pittance for them.

        • Dem Young Sconies 11.2.1.1

          THIS!

          All NZPower would need to do is set the purchase price below the cost of production. The value of the generators would plummet, and the assets could be completely renationalised without the tax-payer overcompensating the fat-cats. The likes of Contact, Trust Power and the Todd Corporation must be brought back under government ownership – I agree with Winston Peters on this one.

          • Colonial Viper 11.2.1.1.1

            Exactly, use the frakking system to achieve the ends you want. That’s what the neoliberals do.

  12. Herodotus 12

    As the majority of the power generation coys are soe’s and that the dividends were paid back to the government, as there is a proposal to reduce the profits earned by these soe’s how will the loss of dividends to the govt be replaced?
    As mentioned in another post what impact is there on power prices for an ets being implemented or has such a scheme been dropped form labour and the greens ?
    http://www.nbr.co.nz/article/mighty-river-leads-soe-results-pays-government-230m-dividend-109831
    http://www.stuff.co.nz/national/politics/2927310/500m-plus-dividends-for-Govt

  13. OK that’s creeping up on power, what about a roof over our heads?
    A notice I spotted on an exhibition on Viennese public housing in NY.
    Mr Shearer has some connection with NY City.
    Maybe he should widen his horizons.

    “For those in New York City with an interest in public housing, communal
    apartment living, architecture and social democracy (history and current -
    granted you only get glimpses but enlightening nevertheless), the exhibit
    “The Vienna Model: Housing for the 21st Century City” at the Austrian
    Cultural Forum New York (11 E. 52nd St.) is a must see. Sitting or standing
    to watch the looped, subtitled video featuring 36 case studies of Viennese
    public housing is well worthwhile and you will wish you lived in any number
    of them (I admit that I only saw about half so I need to go back when I’m
    in town again). About 60% of the Viennese population lives in municipally
    built, owned, or managed housing. Exhibit open daily 10 am to 6 pm through
    Monday, Sep 2, 2013.”

    For starters here’s Karl Marx Hof
    https://www.youtube.com/watch?v=FcoqB7Rxee0
    And Hundertwasserhaus (we already have the toilets)
    https://www.youtube.com/watch?v=waQy85laEyM

  14. felix 14

    Simon Bridges is a little treasure isn’t he?

    Banging on in the house today about the glories of the phony electricity “market” he kept repeating that by switching from the most expensive to the cheapest phony power company you could save hundreds of dollars a year, so no problem.

    In Simon’s world, if one company increased their prices by 100% and another increased prices by 50%, everyone’s better off thanks to the potential savings you could make by switching.

    Bless him.

    • IrishBill 14.1

      I was listening to him on RNZ this morning and realised that the Nats will need someone else to front this. Nobody is going to listen to a little upstart telling them what’s best for them. Especially someone who was probably in shortpants when the Bradford reforms went through.

      Listening to him passing judgment on who was ready to govern and who wasn’t was one of the funniest things I’ve heard all week.

      • felix 14.1.1

        Another job for SuperJoyce perhaps?

      • Te Reo Putake 14.1.2

        “Especially someone who was probably in shortpants when the Bradford reforms went through.”

        Simon Britches?

      • ghostrider888 14.1.3

        Yep

      • Jim Nald 14.1.4

        I am in two minds about offering sage advice to Natz diggers who are preparing their own political graves.

        Nah, keep Simple Simon on the job.
        If a replacement is needed, rope in Joyce-stick’s ethnic Korean colleague, Melissa Lee, or that stunning genius called Kanwaljit Singh Bakshi.

        I want to see what my taxpayer’s money is worth with the current lot of government MPs. And see them actually do an honest day’s work.

  15. thankyou! 15

    Thank you for this post! I’m newish to the standard and actually to caring about politics in general, and firstly i’d just like to say thank you so much – ive got my political news from the herald for years thinking that’s the best option, and it’s kinda blown my mind reading the super intelligent and thoughtful posts, comments, discussions and links on this website, about the same issues so averagely reported in the MSM.

    I’ve never posted here cos actually im kinda intimidated by you peeps … :P but i have a sincere (maybe silly sounding) question and i would like to know what you think.

    How do you convince the average-cant-be-farked-with-this-politics-shit nzer not to listen to the suits waving the money and the bits of paper and to think for themselves? And how do you make people feel like they actually have a voice … and the ability to weigh into the argument?

    I ask because I just seem to be surrounded by so many (awesome) people who just seem to feel so totally disconnected from politics and the decisions that are made about our country everyday.

    • ghostrider888 15.1

      steer them peeps here

    • rosy 15.2

      “actually im kinda intimidated by you peeps”
      hehe – not an unusual feeling, but most are kinda nice really ;-)

      “How do you convince the average-cant-be-farked-with-this-politics-shit nzer not to listen to the suits waving the money and the bits of paper and to think for themselves?”

      Good question. I’ve yet to find a good answer.

      Maybe start with what affects them personally? Otherwise yeah, steer them here.

      • felix 15.2.1

        “actually im kinda intimidated by you peeps”
        hehe – not an unusual feeling, but most are kinda nice really

        Yep even the bastards here are pretty good bastards on the whole.

  16. Sosoo 16

    Hurrah! I might actually vote in the next election now.

  17. ghostrider888 17

    the tories “lost their cool” indeed (not that they ever were very chilled out, just icy)

  18. phil 18

    At last, the Labour party have a policy to sell. I am not convinced of their conviction. It will take much more than this to win power. Mind you, it’s the governments to lose, and Labour’s to take over by default. I’m beginning to think that the last Clark government lost its way and caved in to corporate Interests.

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    Green Party Co-leader Metiria Turei says another interest rate hike on Thursday will cost home owners an extra $25 a month on a $250,000 mortgage, on top of the $25 dollars a month from the previous rates rise, and she...
    Greens | 23-04
  • Green Party launches Internet Rights and Freedoms Bill
    The Green Party has today launched the Internet Rights and Freedoms Bill, New Zealand's first ever Bill crowdsourced by a political party.Members of the public will be invited to shape the proposed law, which will protect ten basic rights and...
    Greens | 23-04
  • Sanil Kumar has to leave New Zealand tomorrow
    The Associate Minister of Immigration Nikki Kaye’s decision not to intervene means kidney transplant patient Sanil Kumar must leave New Zealand by tomorrow, says Labour’s Immigration spokesperson Rajen Prasad. “Kumar, a plumber and sheet metal worker, was on a work visa...
    Labour | 22-04
  • Time to do the right thing for our veterans
    A Labour government will adopt the Law Commission’s recommendation to ensure all war veterans are eligible for a Veteran’s Pension, Labour Leader David Cunliffe says. “Veterans are only eligible for the pension if they are considered ‘significantly’ disabled, or more...
    Labour | 22-04
  • Public servant is owed an apology
    Nigel Fyfe is owed an apology from the State Services Commissioner Iain Rennie and Foreign Affairs Minister Murray McCully, says Labour's State Services spokesperson, Maryan Street. “The former MFAT official has now been restored to a position in the Ministry...
    Labour | 22-04
  • Laws for enforcing not trading off
    The idea that a Government department can give a nod and a wink to traders that it won’t enforce shop trading laws and for a Government MP to then claim it as grounds for a review of the law is...
    Labour | 21-04
  • Kiwis still paying too much for ACC
    Kiwis are still paying too much for ACC so that the National Government can balance its books, Labour’s ACC spokesperson Iain Lees-Galloway says. “ACC Minister Judith Collins told Cabinet levies were too high but ACC’s proposed cuts would impact the...
    Labour | 21-04
  • Collins’ memory recovery raises further concerns
    Judith Collins sudden memory of briefing the New Zealand Ambassador to China about her dinner with a Chinese border official and her husband's fellow Oravida directors raises further concerns about exactly what was discussed, Labour MP Grant Robertson says. "This...
    Labour | 21-04
  • MP to attend progressive politics conference
    Labour MP Grant Robertson will attend the Progressive Governance conference in Amsterdam later this week. “This conference brings together Social Democratic parties from around the world to discuss how progressive politics should work in the post global financial crisis environment....
    Labour | 20-04
  • Storm fans fire service commitment
    Further damage from the huge storm that battered the West Coast was prevented by the great work of our volunteer Fire Service and locals will be extremely grateful, Labour’s MP for West Coast-Tasman Damien O’Connor says. “Our region has been...
    Labour | 19-04
  • Time for Ryall to fix mistakes and help families
    Families who won a long and lengthy Court battle for financial help to support their disabled daughte