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Lest we forget

Written By: - Date published: 10:15 am, September 4th, 2011 - 42 comments
Categories: election 2011, energy, privatisation, same old national - Tags:

In the lat-90s, National’s Max Bradford started the privatisation process of energy companies, setting up the SOEs and selling Contact. Electricity prices have risen at two and a half times inflation since then. Now, National wants more privatisation. Have we forgotten why we voted them out in 1999?

– image from Frank M

42 comments on “Lest we forget ”

  1. Afewknowthetruth 1

    Some of us remember all the way back to Think Big and how that was going to save us, to the deregulation [Labour] government of the mid-80s and how that was going to save us, to the muddling along years of Jim Bolger, to the scandal-a-week government of Jenny Shipley and to the much-hated government of Helen Clark that was going to save us.

    There has been one consistent theme over the decades. No government does anything for the long term benefit of New Zealanders but they all like to tinker.

    Other things I have come to realise are that most people seem to have difficulty remembering something that happened a month ago and an awful lot don’t care.

    Of course, they’ll all be complaining bitterly when they lose most of what they have a few years from now.

  2. Peter nickle 2

    But I thought this site wants higher power prices so we can leave a smaller carbon footprint?
    What do you want, lower prices and more burnt carbon or vice versa? The message is not clear to me.
    9 years of Labour did what tell me to decrease power prices?

    [this site doesn’t want anything nor is it responsible for Labour. It’s not a choice between more carbon and lower prices. 80% of our power is carbon free already. Eddie]

    [lprent: The Standard doesn’t have an opinion or wants – it is machine. Read the policy about the difference between people and machines. Use that particular stupid tactic again and I will demonstrate what it is like to annoy the person running the machine. ]

    • crashcart 2.1

      Wow great straw man. Of course those higher prices will be to reduce consumption and not to fleece private investors? I am sure the private investors will push for money to be invested in more green power production.

      The RWNJ’s are really getting desperate for excuses as to why this is a good idea.

    • Peter nickle 2.2

      You confuse me with someone who gives a fuck what you think and do on your site.
      You are a complete thick ignaramous who thinks your interlect intellect is greater than reality.
      Enjoy your next few years whinging about the National Govt.

      [lprent: Always nice to find someone so illiterate that they are unable to use their automatic spellchecker on their browser. But hopefully that was just because the gobbets of spittle obscured the word? I fixed it for you. ]

      • Ianupnorth 2.2.1

        Oh, you’re hard!

      • mikesh 2.2.2

        You missed fixing “ignaramous”.

      • McFlock 2.2.3

        His argument’s so powerful he doesn’t need to spell properly. Or take rabies shots.

      • Perhaps Peter is Max. All these years he’s been scouring the internet looking for any mention of his name, increasingly pissed off that he has fallen into the abyss of obscurity. Now, while sipping strained tea laced with his daily laxative at The Retirement Home for Former National  Lapdogs he finds someone has remembered him – but not in a good way.
        After being energized by the old German man with a Chaplin moustache frothing at the mouth next to him (who is in a chatroom arguing against people who blame a failure of leadership for the failure of the invasion of Russia in 1941), Max logs into The Standard under an assumed name to present cogent arguments in support of Max Bradford.

    • ropata 2.3

      @peter nickle, perhaps you’re confused by National spin doctors.
      It’s not a binary choice between low power prices vs. low CO2 emissions, both are possible with energy conserving measures and good infrastructure governance rather than naked profiteering.

      New Zealand’s electrical energy generation, previously state-owned as in most countries, was corporatised, deregulated and partly sold off over the last two decades of the twentieth century, following a model typical in the Western world. However, much of the sector remains under government ownership as state-owned enterprises…

      All of the governments energy assets originally came under the Public Works Department. From 1946, the management of generation and transmission came under a new department, the State Hydro-Electric Department (SHD), later renamed in 1958 as the New Zealand Electricity Department (NZED). The reformist Fourth Labour Government corporatised the department as a State Owned Enterprise in 1987, as the Electricity Corporation of New Zealand (ECNZ), which traded for a period as Electricorp. In 1994, ECNZ’s transmission business was split off as Transpower. In 1996, ECNZ was split again, with a new generation business, Contact Energy, being formed. The Shipley Government privatised Contact Energy in 1999. From 1 April 1999, the remainder of ECNZ was split again, with the major assets formed into three new SOEs (Mighty River Power, Genesis Power and Meridian Energy) and with the minor assets being sold off.

  3. prism 3

    @AFWKTT Pity you can’t work with a shorter name say Know the Truth, much easier to handle. The Think Big projects did build some stuff right here in NZ using NZ labour etc and did build infrastructure.

    • joe90 3.1

      Yup, Think Big wasn’t all bad, the tripling of my wages when I scored a job at Motonui allowed me the luxury of paying my way out of my 17-23% home loan interest rates.

  4. I had given up hope that people would ever mention the name of that odious man again.
    Let alone remember that he was behind taking SOE’s returning some $280 million per year in 1990/91 dollars into the absolute balls-up of an industry today.
    Why has he escaped the “radar of blame” when he boldly promised us cheaper power from the implementation of free market ideology?
    Not only was he ideologically wrong but he was incompetent in its execution. What he created wasn’t a free market but a dog’s breakfast (sorry dogs!) collection of private companies, monopolies, SOE’s, virtual monoplies that has not produced any evidence of cheaper power being in our future. Just the opposite.
    I can only assume that Labour thought it too much of a fragmented and complicated a mess that it would have been too expensive to clean up and would have involved some re-nationalisation of former state assets.
    Certain Gerry “I’m-sorry-but-I-cant-protect-the-equity-in-your-home-after-all” Brownlee has done sweet FA to fix it all.
     
    I had dealings with Maxy Boy when he was representing the Bankers Association and the impression he left me with was that I saw his sojourn in politics as more of the same – brown-nosing those who had power and could think for themselves, never having an original thought of his own, and way out of his depth as a minister.
    Maybe I had him wrong – but I have always been surprised that his reputation remained intact and I still curse him every time I get a power bill.
     
    Imagine a small country at the bottom of the south pacific that uses the green technology that it’s grandfather’s built to provide electricity to it’s people and especially it’s industry and transport in the formula of
    cost + R&D and future development + return to government = retail price.
    No more no less. All state owned as a public good.
    Industry with cheap energy – electrification of public transport and freight.
    Grandmothers aren’t discovered dead of hypothermia in their snuggle sacks when the power company calls to cut off their power.
     
    As Jim Anderton in the very beginning “Who are the going to complete against? The candle makers!”
     
     

    • Lindsey 4.1

      Yes, so did I. He was always an arrogant prick.

    • Draco T Bastard 4.2

      …brown-nosing those who had power and could think for themselves, never having an original thought of his own, and way out of his depth as a minister.

      That describes National to a tee. Watch them. They always kowtow to authority figures and whine when people don’t do what the authority figures tell them to do without question. Pure Right Wing Authoritarian.

      Works with Act, the “liberal” party, as well.

    • millsy 4.3

      Sure is a dog breakfast. Really.

      It seems to be that the best place to introduce competition into the system would be the generation side, not the retail side.

  5. millsy 5

    The power industry is a crock.

    Since 2006 I have been working for a company that reads the power and gas meters on behalf of the major power companies (in the office — I work on getting the data out to the meter readers from the companies and the reads from the reader, back to the companies), and while our company has a good reputation, and all the workers give their best and work hard, and we have some brilliant people doing brilliant things, I just cannot help but think that the way things are set up its all a great big bloated mess. with all sorts of people clipping the ticket on the way through. I really don’t see anything wrong with the local network companies handling the billing, etc.

  6. Afewknowthetruth 6

    prism

    ‘Think Big’ got NZ’s finances so far out of kilter the incoming [Labour] government had to devalue overnight to prevent the economy collapsing. Plant originally costed at $800 million ended up costing $2,000 million because there were so many ‘cock-ups’ and so much wastage.

    But, as anyone who knows anything about international finance knows, ‘the game’ is to get communitiies and nations into as much debt as possible.

    When ‘Think Big was being promoted there were promises of downstream industries and tens of thousands of long term jobs, none of which eventuated.

    And the Think Big projects squandered precious fossil fuel resources in processes that were 50% efficient.

    For instance, it would have been a lot cheaper and a lot more efficient to GIVE EVERY MOTORIST IN NZ a CNG conversion kit than build Motunui. But that woud not have provided short term contracts and long term profits to global corporations. Nor would it have provided huge ‘back-handers’ to people liike Bill Birch.

    I use ‘AFEW’ because so few people do know the truth or bother to work it out.

    Most people take whatever nonsense they are presented with by governments, politicians, political parties, local government, global corporations, economists etc. and accept it as truth.

    • prism 6.1

      @Affktt You’re right but I think you are too critical. The Motonui thing was surely a genuine attempt to provide for our future fuel when things were looking bad for supplies from the traditional sources. It was not efficient as obtaining petrol from these sources but meant we couldn’t be cut off drastically.

      As for jobs, there is always a big hoo-ha about what opportunities building infrastructure will provide, but when it’s finished so are those jobs. But useful infrastructure supports increased business activity through the extra amenities of better transport conditions etc. so there should still be extra jobs if the amenity has been properly sited and planned.

      And wasn’t one of the reasons for the economy being fragile that there had been a long period of high inflation and yet a drop in employment and business activity, and also wasn’t our currency over-valued. That combined with Muldoon’s failure to officially hand over the reins of finance immediately to the new government allowed time for capital flight before decisive moves to devalue could be made by the new Labour government.

      • Draco T Bastard 6.1.1

        And wasn’t one of the reasons for the economy being fragile that there had been a long period of high inflation and yet a drop in employment and business activity,…

        Stagflation hit every single developed country in the late 1960s/70s as, from what I can make out, the markets became saturated and the governments went on a spending binge financed by borrowing to maintain employment and consumption. Even now the biggest complaint about the economy around the world is how consumption isn’t increasing. It’s the Crisis of Capitalism that Marx predicted and the response throughout the world is to use up even more of the limited resources that the world has to prop up profits and the delusional Fractional Reserve Banking system exactly as I predicted (specifically I said that profit driven free-market capitalism will use up all resources as fast as possible resulting in catastrophic collapse of the economy, the environment and that such a result is inevitable no matter what restraints that we manage to put on it).

        The sale of state assets is also a response to the Crisis of Capitalism which we saw in the 1980s/90 and again now as it puts natural monopolies into private hands forcing people to over pay for what is an essential service/good while also removing community restraints over the use of the resources that the natural monopoly uses allowing those resources to over exploited. Selling the state assets is nothing more than a transfer of the communities wealth to the rich.

        …and also wasn’t our currency over-valued.

        Yes it was specifically due to the 3rd National governments borrowing and Muldoon refused to reduce the value. Muldoon’s refusal to hand over the reigns of power probably resulted in an even bigger loss to NZ but Labour had already hinted that they would lower the value after the election and so many people had speculated into the NZ$ just before the election resulting in about $700m being transferred from NZ to the speculators. Big Business did very very well out of the policies of the 4th Labour government and Roger Douglas – the workers and the community got shafted.

        • prism 6.1.1.1

          @DTB
          Thanks for comment. Meaty reading (I’m not a vegetarian.)

          Labour had already hinted that they would lower the value after the election and so many people had speculated into the NZ$ just before the election resulting in about $700m being transferred from NZ to the speculators.

          Was it a mistake then for Labour to have discussed this sensitive matter of devaluation before the election? Knowing that it is irresistible for many with the know-how of the financial world to speculate to our detriment.

    • mik e 6.2

      The Clyde dam was supposed to cost $450 million it cost $2.5 billion Incis was supposed to cost $10 million it never worked and cost $120 million National gets away with ripping off New Zealand by the billion yet when labour is in power they are not aloud to be openly gay{as opposed to nationals closeted type there aloud ] speed help raise funds for a charity with out the main stream media taking them apart

  7. Jonathan W 7

    I find this cartoon extremely offensive. Using a phrase commemorating the memory and sacrifice of those who served their country for a cheap political point is truly pathetic.

    • lprent 7.1

      As an ex-soldier I don’t find it offensive. In fact, it sounds pretty much why the phrase was used in the first place as a response to the ode of remembrance. But I could go and ask my slightly deaf gunner (El Alamein) great uncle mike , the few other remaining WW2 servicemen left in the family, other vets, or the ones currently serving if they’d find it offensive. But I suspect that they’d find your attitude pretty damn silly.

      Sounds to me to be more like you just don’t like the cartoon.

      • mik e 7.1.1

        JW This is politics not war even though they are both dirty business. Complain to Tremain his wife is an act member.

    • Draco T Bastard 7.2

      Those who fail to learn from history are doomed to repeat it, hence, Lest We Forget.

    • Colonial Viper 7.3

      I find this cartoon extremely offensive. Using a phrase commemorating the memory and sacrifice of those who served their country for a cheap political point is truly pathetic.

      Hey braniac those who served and sacrificed for NZ didn’t do so in order for NZ to be sold off bit by bit to foreigners.

      You see, selling this country out is what is truly pathetic and disrespectful.

      Your pretence of false sentimentality has no idea of the NZ ideals that those old soldiers actually fought and died for.

  8. ropata 8

    Which is worse?
    a) selling off assets built by our parents and grandparents and liquidating our childrens’ future
    b) a satirical cartoon

  9. hoom 9

    Why can’t Labour put out a policy for a real solution to the Electricity Market problem?
    Minimal tinkering that they did in power is no solution.

    Pretty much everyone out there is hankering for some kind of big change that will reverse the endless price increases, phoney ‘competition’ & market gaming that currently plague the market.

    My suggestion:
    -Rejoin the 3 SoEs and transmission company.
    -Mandate the new entity to generate & distribute wholesale electricity with these priorities:
    1: Reliability (no more artificial crises)
    2: Clean sustainable generation (because we can & should)
    3: Energy efficiency & minimal cost to the consumer (better insulation, more efficient appliances = less demand = less need for new expensive generation & lines = lower costs)
    4: Neutral or minimal profit (current profits to Government is nice but you could call it tax by stealth & far too much of the revenue is funnelled into Executive/Accountant/Marketing bank balances)
    -Return retail to regional Line trusts.
    -Contact will have to compete across the existing market system against that.
    (Being a privately owned company that is inherently drastically more efficient than state owned companies they shouldn’t have any issue becoming the dominant player right??? I mean after 15 years there can hardly be more than a few % of consumers left who have not switched to the naturally more efficient Contact)
    -Offer to buy Contact shares at some low-ball price if shareholders are unhappy about it.

    • Draco T Bastard 9.1

      Agree with #4. Natural monopolies such as telecommunications/power should be state owned and have close to zero profit. Actually making a profit in such a position is just taxing by a different name.

      Return retail to regional Line trusts.

      There should be no such thing as retail or, to be more precise, everyone should pay the same charges. Use a block charge system to encourage people to use less. Smaller blocks cost less than larger ones (basic supply and demand) and going over the amount signed up for costs a huge amount.

      Offer to buy Contact shares at some low-ball price if shareholders are unhappy about it.

      Just tell them that they’ve had their fun and that they now have to hand it back – no compensation.

      • hoom 9.1.1

        Well a regional monopoly trust would not really be retail but I meant remove the current Retail market.
         
        I don’t think we are quite at compulsory Nationalisation somehow, hell selling off these assets hell or high water is giving Nats 60% polling.
        By forcing the private enterprise to compete we get an actual market.
        Rather than just sit on their 1/4 of the 4 way artificial market they will either actually try to beat price of the bigger player = win for citizens, or their shareholders will want out through ‘normal free market forces’.
        A standing low-ball offer would just make that way out more attractive.

        • mik e 9.1.1.1

          Show me large companies that compete in NZ. There are Monopolies duopolies oligarchies colluders in pricing there is no real competition its a figment of your imagination.

  10. hoom 10

    Motonui has been a great success.
    Not as originally planned but under its privatised name Methanex & reworked to produce Methanol.
    They took great advantage of fixed price contracts to gobble up 80% of Maui gas for dirt cheap.
    Now they even get Carbon Credits for it too!

  11. Tom Gould 11

    Anyone noticed how Max has taken down his website content bragging on the benefits of electricity market dergulation and privatisation, especially the old stuff about how much power charges would fall as a result?

    • Max Bradford 11.1

      No he hasn’t. It’s still there at http://www.maxbradford.co.nz. And by the way, power prices did fall from 1999 to 2000 or thereabouts, when they exploded under Labour’s policies….power prices went up by 72 percent far in excess of inflation, from 2000 to 2008 when they were tossed out of office. Labour’s policies were the cause of the power price rises, not the creation of an electricty market.

      If you want to find out the facts, send me your email address and I’ll send them to you.

      [lprent: Looks legitimate. ]

      • “If you want to find out the facts, send me your email address and I’ll send them to you.”

        Why not post the details here, so we can all look at them. If the data is accurate and from an impeccable, non-partisan source, wouldn’t you be very keen to make them public?

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