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Labour’s electricity reforms will be bold

Written By: - Date published: 12:21 pm, April 16th, 2013 - 59 comments
Categories: energy, greens, labour - Tags: , ,

As covered here yesterday, Labour has signaled that they intend to reform the electricity market so as to lower prices for consumers.

The initial announcement signaled little detail, and the usual critics and spinsters squawked as usual that Labour wouldn’t or couldn’t deliver. Well they’re wrong. David Shearer (ht TRP in comments) has the following post on Facebook:

This Thursday at noon Green Party Co-leader Dr Russel Norman and I will hold a joint press conference to unveil policies to bring down power prices and give Kiwi households some financial relief.

Here’s my prediction. This announcement will be bold. Capital gains tax bold. KiwiBuild bold. Labour isn’t planning to sit around and wait for the next election to fall in to their laps, they are going to be offering, in collaboration with the Greens where possible, a clear and strong alternative. The announcement on Thursday will be part of that strategy.

59 comments on “Labour’s electricity reforms will be bold ”

  1. Coronial Typer 1

    The cooperation is good, but…

    If Greens/Labour announce effectively killing the tradeable electricity market here, will they explain the impact that will have on the value of the company assets they inherit and the income they will be able to spend in their already limited budget?

    Or is there another announcement due showing how they will fill the budget hole they are creating?

    • r0b 1.1

      The more that assets get sold off, the less that the income from those assets matters to the government…

      • Coronial Typer 1.1.1

        Exactly the opposite: the less income they have from dividends, the less they have to spend on citizens. As you will have seen, the budgets are tight for some tight for some time.

        But my particular point is: they will now be co~owners, and they need to be responsible shareholders (particularly if they don’t have the cash or will to buy them back), and wilfully destroying shareholder value is irresponsible both to the government’s future accounts and to those who invest.

        Buyer beware is fine, so long as a future government realises that they are just another shareholder, and need to show that they are calculating the risks to their own accounts. Or they are irresponsible and damaging to everyone’s interests be they direct or indirect owners.

        • Colonial Viper 1.1.1.1

          You’re speaking of the Crown as an asset owner.

          Let’s speak of the Crown as the Sovereign.

          • Coronial Typer 1.1.1.1.1

            You see, in a partial sale they are less so. Power shifts from state to regulators. It is the worst of all worlds that the ambit of state sovereignty shrinks further, and the market grows. This is the pattern since the first privatisation. Government will no longer be able to clearly separate legislative force from its financial interests, which are now tested not by democracy but by the private sector stock exchange. Clearly that it what National wants; a state as mere regulator. Shearer and Norman will need to step with real precision.

        • Murray Olsen 1.1.1.2

          When we have a country full of kids and pensioners who are sick because they can’t pay their power bills, the dividends and anyone wanting to profit off electricity supply, whether local or foreign, can take a long walk off a short wharf.
          I am far, far more interested in keeping people clothed, sheltered, and healthy than I am in the greed of a few investors. Even talking about profits and dividends puts us on a slippery slope to doubling charges, or worse. These are obscene words and anyone on the left who utters them without spitting when it comes to people’s health should wash their mouth out with industrial grade drain cleaner and a wire brush.

    • Lanthanide 1.2

      Labour says their plans are fully costed.

      • BM 1.2.1

        Like kiwi build?

        • Bunji 1.2.1.1

          KiwiBuild is well costed – it needn’t and doesn’t cost anything long-term, just makes good use of Government purchase power and mass production to massively reduce prices before selling the houses at just above cost (covering the intervening interest).

      • King Kong 1.2.2

        Hopefully it wasn’t David Cunliffe who did the costings. After the way he hung Goff out to dry in the last election you can bet he would do the same thing to Shearer.

        • Colonial Viper 1.2.2.1

          Didn’t you hear? It was actually a Russian/Irish plot, the miscalculated unremembered numbers.

      • Coronial Typer 1.2.3

        Looking forward to that. As will every broker. This is a great political spike but an appalling signal to local shareholders to give up and let the foreigners take it all.

        • Bunji 1.2.3.1

          Surely foreign shareholders, driven purely by profit, will be more affected than local shareholders by any announcement that prices and profits will be reduced?

          • Coronial Typer 1.2.3.1.1

            Not with the degree of information asymmetry that the institutions are getting from the selected brokers, compared to locals. Those with a patriotic chequebook are being kneecapped.

    • One Anonymous Knucklehead 1.3

      One obvious way: by reducing prices to citizens and local industry, they will reduce the amount of profit going straight offshore, which will instead boost the local economy and provide greater tax revenue as a result.

  2. Colonial Viper 2

    Bold is good.

    PS capital gains tax initiative got the support of a lot of mainstream economists and financial commentators (and apparently us and Turkey are virtually the only places without a CGT?) = it may have felt bold, but by definition it was not bold enough.

    • r0b 2.1

      It wasn’t bold economically, but it was bold politically.

      • quartz 2.1.1

        My understanding is that this is the Greens policy and that Labour are piggybacking it. Is this an attempt to get in early for Labour?

        • Blahsteve 2.1.1.1

          This is what I heard too.

        • Te Reo Putake 2.1.1.2

          It’s a joint proposal, who cares whose idea it was first? And if Labour are picking up on Green proposals, that’s yet another reason to celebrate IMHO.

        • irascible 2.1.1.3

          In all likelihood the policy announcement has been coordinated based on an initiative coming, like Phil Twyford’s ongoing Auckland transport campaign, from Labour strategists then spun by the Greens to be theirs??

    • Bunji 2.2

      in OECD it’s us+Turkey+Switzerland without CGT.

      Wonderfully progressive – something like 90+% is paid by top 1-2% wealthiest…

  3. BM 3

    My guess is they’re going to announce some new emission tax .

    • King Kong 3.1

      Power will be made free to households and small/medium enterprises.

      Funding will come through NZ becoming the leading exporter of dream catchers and healing crystals internationally. A state of the art production facility will be built in Nelson including the largest comercial drum circle studio in the Southern Hemisphere.

      • The Al1en 3.1.1

        Good, and I hope plenty of rich pricks drop by and see how much fun we’ll be having when we’re playing with their money.

  4. James 4

    I’m, um guessing that, um there, um will be nothing, um in it.

  5. tarkwin 5

    I hope he succeeds. Even if he found a way to stop increases it would improve his popularity no end. No doubt the Greens will be pushing their ETS scheme hard, so it’s hard to see how a Labour/Green coalition will finance this.

    • Pete 5.1

      It will be interesting to see the next polls, whenever they’re due. If the opposition hasn’t gained much traction from the past two weeks, I can’t imagine there’d be much success in 2014.

  6. Te Reo Putake 6

    Cheers for the hat tip r0b and thanks for the post. For me, the important thing about this joint announcement isn’t so much the plan to lower power prices, but the message it sends to the voting public that the next Government is going to be Labour + Greens. The lesson from the first Clark election win is that if we present a coherent alternative Government at a time when the public is going off the incumbent, then we win.

    It really is that simple.

    National are fast losing coalition options, we are firming up ours. Their leader is looking more and more desperate and dissembling, our leaders are looking more and more focussed and forward looking. It has been a slow grind getting to the point where the alternative is clear, but I think we’re there now.

    • King Kong 6.1

      Certainly paints NZ First into a corner so I don’t know how smart it is setting out your coalition stall so early in the piece.

    • r0b 6.2

      Agreed on all counts.

      • quartz 6.2.1

        Then why is the pitch here all about “labour’s” policy rather than “The Greens and Labour’s” policy?

    • Coronial Typer 6.3

      +100
      Spot on again today TRP

    • Peter 6.4

      Well, it does send that message, but it also sends the message that Shearer can’t perform without Norman there, and there are still plenty of people who worry about tail wagging dog syndrome with the Greens.

      • One Anonymous Knucklehead 6.4.1

        The Greens can expect to be supplying 25 – 30% of the seats in a Labour/Green coalition.

        That’s a lot more than a “tail”.

        • AmaKiwi 6.4.1.1

          25% to 30%? I think you underestimate. Why vote for Shearer when you can party vote Green and in so doing help oust National AND promote a more left wing government? Electorate vote Labour. Party vote Greens.

    • ianmac 6.5

      Good one TRP.

  7. Peter 7

    I may have word-eating to do, depending on how bold the announcement is. With Norman there I have some hope it’ll be something more than round four of tinkering with the market rules.

  8. Enough is Enough 8

    Shearer quite simply has to nail this.

    If he comes out and with a vague Mumblefuck policy that lacks clear detail he will be set on by bully boy Key and the ‘National’ media.

    His record to date suggests he will struggle to articulate himself, perhaps the reason why Norman will be there.

    In any case good luck David. We expect something damn good.

  9. geoff 9

    Bold = dismantling the bogus market system that Mad Max Bradford created.

    Nationalise what you need to and give every household an annual rebate on their electricity bill of ~8000kWh.
    If you use more, you pay for it.

    Simple.

    Job done.

  10. CraigM 10

    Look i have never heard such drivel from Shearer , in fact he is getting worse , you seriously need leadership , you do not get it kiwis are happy to sell assets ! why not accept that the majority of Kiwis grasp economics ?? i am not taking the pi## but really labour polies need a fair boot , the greens are taking all of your vote , cmmon give us blues some decent competition at the next election not a walk in the park. !!!

  11. Populuxe1 11

    I’m still trying to proccess “Shearer” and “bold” in the same concept… And not getting very far

  12. UpandComer 12

    I guess this will mean that power prices will rise astronomically under Labour, again, in real and relative terms, because that is what always happens and has happened.

  13. hush minx 13

    Labour has an easy defence against the suggestion that they are just piggy backing of the Greens – if Shearer is front and centre explaining the policy and how it fits into Labour’s then it’s sealed as his success.

  14. Sonny 14

    Well when Labour was in power last Electricity went up by 72% They did nothing about it.. Why now this Bluster?

    • Te Reo Putake 14.1

      72% in 9 years?

      • felix 14.1.1

        Don’t worry about the numbers, they’re dinimic.

        The point is that if you haven’t done something before, that means you can never ever do it.

        • Colonial Viper 14.1.1.1

          Although having a robust centralised not for profit electricity system is something I do recall NZ having done in the not too distant past.

  15. So the Greens and Labour are going to be making joint policy statements well ahead of the next election, showing how they can work sensibly together now, offering an alternative government in waiting to the electorate and debunking one of the nat’s main campaign angles at the same time. Nice work.

    Glad some one was listening, but shame you couldn’t have written back a year ago and said thanks for the fucking great idea, now what else have you got for us, Hlm? 😆

  16. millsy 16

    I keenly await Thursday. My power bill taking up more and more of my income, I am keen for something beyond relying on ‘competition’.

    Some form of central co-ordination/planning sounds good to me, as well as allowing lines companies to become generators and retailers and vice versa.

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