web analytics

Supporting NZ Power

Written By: - Date published: 12:37 pm, May 6th, 2013 - 12 comments
Categories: business, economy, energy - Tags: , ,

The chief executive of the New Zealand Manufacturers and Exporters Association supports the Labour / Green electricity proposals. Well worth clicking through to read the whole thing…

A dissenting business view on the Greens/Labour NZ Power policy

COMMENT

Since the release of the NZ Power proposal there has not been a solid, logical debate about what NZ Power might mean, and the current problems inherent in the electricity market.

What we witnessed this month in New Zealand politics reminded me of a line from Bob Edlin inManagement magazine a few weeks ago, Bob said “If scorn is better than robust debate at shaping good policy, we are in good hands”.

That pretty well summed up the government’s response to the NZ Power proposal from Labour and the Greens. Business New Zealand and other organisations urged Labour and the Greens to revoke the policy in an open letter.

The letter reads to say that higher electricity prices would better serve New Zealand businesses incentives to innovate. Would this really be the case? These are echoes of the comments made by the same group before the unbundling the local loop.

Sadly, scorn, distortions and exaggerated characterisations heaped on ideas and individuals seem to be an ingrained response from many; dismissing any new ideas at odds with the status quo.

Not very different

Take a look at Wikipedia’s entry on the New Zealand electricity market and you don’t have to read very far to see there is already a single regulator that balances supply, demand and price. Not very different than NZ Power as we read the proposal.

The key difference is the pricing mechanism, not the entire system. …

Perverse incentives

LRMC introduces some perverse incentives, bid less volume and make more money by ensuring the highest cost generators remain in the market and over time tend to run the market towards a supply deficit. These are gaming opportunities (ship less make more) that tends to bias incentives away from new large-scale low-cost electricity generation. These are perverse outcomes that have the opportunity to damage the rest of the economy because electricity costs more than might otherwise be the case. …

Removes windfalls

… It is about balancing the trade-offs between a tendency to support the expensive generators and pass windfalls to the lower cost generators, or introducing a system bias to ship the lowest cost watts available to the benefit of the wider economy.

John Walley is chief executive of the New Zealand Manufacturers and Exporters Association.

12 comments on “Supporting NZ Power ”

  1. johnm 1

    The support for NZ Power by the NZMEA clearly shows up in a harsh light NeoLiberalism’s destructive emphasis on 1. Finance fueled asset bubbles 2. The cannibalisation of Public Wealth to make rentier monopoly profits for the wealthy at the expense of a low energy cost controlled to assist manufacturing and the public. 3. The parasitic nature of neoliberalism—- invest in nothing not your own country or its people or its manufacturing but follow the market: go where the easy money is by controlling essential resources and charging and charging for them even as in the U$K sell off your public utilities to foreign corporates. (The Thatcher disaster). 4. People are slot units the useless unemployed and disabled harass them off the benefit for you do not I repeat not see them as persons to invest in. 5. Society does not exist so don’t invest in it sell off and charterise all public schools.

    John key represents this nihilistic neoliberal financialisation serfdom model, he made is dosh playing the game, the game which has destroyed the U$K and U$ economies, both now have steadily increasing poverty. All in the pursuit of money making market advantage rather than investing in your own people.

  2. aerobubble 2

    Companies incorporate and so join the forces of many workers in one unit. Now Labour and
    Green argue that consumers should likewise be able to collectivize their demand and so increase their buying power (sorry pun). The rich socialists want government to continue picking them as winners which hurts small businesses and start ups, along with home owners who have less to spend and keep away from retailers.

    • AmaKiwi 2.1

      aerobubble, you forget the neoliberal sales pitch is that the consumers are supposed to always be winners because of market competition.

      “Companies incorporate and so join the forces of many workers in one unit,” a unit whose only purpose is to make as much money as possible for the shareholders, and the workers be damned.

      The REASON they incorporate is because legally the management is NEVER allowed to consider the social evil they do to workers, customers, the environment. Legally, they must justify every decision in terms of making as much money as possible. If management makes a socially responsible decision which does not produce MAXIMUM profits, management is sued by the shareholders.

      It was not always so. In the beginning shareholders were each personally liable for what their company did.

      It can be that way again.

      • aerobubble 2.1.1

        Labour-Greens have saved a lot of money for tax payers by reducing, as English admitted today in the house, the numbers who will get the share bonus.

  3. vto 3

    Why would John Walley have a view that is so completely opposite from his colleagues such as Phil O’Reilly?

    Something’s smelly

    • Daveo 3.1

      John Walley has a background in business and represents actual NZ-based manufacturing exporters. Phil O’Reilly is a neoliberal stooge who shills for our financier and rentier class.

    • georgecom 3.2

      Walley et al are grounded in the real economy, where real goods and services are produced, real people live and work and profits are tagged to tangible items. Value is created in the trade of items and underpinned by the trade of items.

      Others in the business world are enraptured with the financilisation of the global/nz economy where virtual profits are made. Profits are created in the circuit of finance. profits are not underpinned by actual items.

      The latter, rather than being a tool to ensure the former can function, has become an entity of its own with its own interests, and manipulates the global economy to its advantage.

  4. Craig Glen Eden 4

    Phil O’Rielly’s smelly all right.

  5. HOW’S THE SALE OF MIGHTY RIVER POWER LOOKING NOW – BILL ENGLISH?

    http://www.parliament.nz/en-NZ/PB/Business/QOA/a/0/6/50HansQ_20130416_00000002-2-State-owned-Assets-Sales-Mighty-River.htm

    2. State-owned Assets, Sales—Mighty River Power Share Offer and Electricity Market

    [Sitting date: 16 April 2013. Volume:689;Page:9343. Text is subject to correction.]

    2. TODD McCLAY (National—Rotorua) to the Minister of Finance: What progress is the Government making in its share offer programme to reduce debt and free up capital for priority spending?

    Hon BILL ENGLISH (Minister of Finance) : Yesterday the Mighty River Power share offer opened to New Zealand investors. This is the first offer in the Government’s $5 billion to $7 billion programme. The Mighty River Power offer period is for New Zealand retail investors only.

    This ensures New Zealanders will be at the front of the queue for shares and encourages widespread ownership so that 85 to 90 percent of Mighty River Power shares are owned by New Zealanders.
    [HOW’S THIS LOOKING NOW BILL??
    CALL OFF THE SALE!]

    New Zealanders have until 3 May to apply to buy shares. Shares are expected to be listed on the NZX on 10 May.

    Todd McClay: How many New Zealanders pre-registered for shares in Mighty River Power?

    Hon BILL ENGLISH: There were 440,000 New Zealanders who pre-registered for shares in Mighty River Power.
    [HOW’S THIS LOOKING NOW BILL??
    CALL OFF THE SALE!]

    Those who pre-registered may get an allocation preference of up to 25 percent if the offer is oversubscribed. We have yet to see just how many of those who have pre-registered will actually apply for shares. New Zealanders with applications for up to $2,000 worth of shares are guaranteed not to be scaled back, and New Zealanders who hold their shares continuously for 2 years will receive a loyalty bonus.

    Hon David Parker: Why did thousands of pre-registrants for the Mighty River Power share offer receive emails last night with their names and reference numbers blacked out? Is it because the Government’s track record on privacy is so bad that it has swung too far the other way?

    Hon BILL ENGLISH: I understand that the provider of the email service detected some kind of error in the system after the emails had gone out. That has been corrected.

    But I can assure the member that that will not dampen the enthusiasm of those 440,000 New Zealanders who have shown an interest in Mighty River Power shares.
    [HOW’S THIS LOOKING NOW BILL??
    CALL OFF THE SALE!]

    They are making serious decisions about their personal investments, and that does not suit the Labour Party, which wants them to—

    Mr SPEAKER: Order!

    Todd McClay: What are the benefits of the mixed ownership programme?

    Hon BILL ENGLISH: There is a range of benefits. In fact, the benefits are significant enough that the Opposition parties have not promised to buy these companies back. These companies will be subject to the disciplines of financial markets, where they are likely, on average, to perform better than under public ownership. Funds raised from this partial sale will be reinvested through the Future Investment Fund. These investments will be in infrastructure, hospitals, schools, and the rebuild of Christchurch as part of a $19 billion capital expenditure programme by the Government over the next 4 years.

    We expect that the sale of shares will raise $5 billion to $7 billion, or around 3 percent of the Government’s balance sheet value.
    [HOW’S THIS LOOKING NOW BILL??
    CALL OFF THE SALE!]

    The alternative is to borrow more on volatile world financial markets.

    Todd McClay: As part of the Government’s wider programme to improve the electricity sector, what progress has been made in making the market more competitive for hard-working New Zealanders?

    Hon BILL ENGLISH: When the National Government came to office in late 2008, we considered it was urgent to do something about the runaway electricity price increases under the previous Government, which had added up to a 72 percent increase, or around 8 percent compound increases, in the electricity prices under the Labour Government. So we commissioned a technical advisory group to review the market, and, as a result, the Government passed the Electricity Industry Act to re-allocate assets among the State-owned enterprises to increase competition in wholesale and retail markets, created the Electricity Authority and made it responsible for promoting competition—a change from the Electricity Commission—developed a liquid hedge market, and created the What’s My Number campaign to promote consumer switching. All of these actions have had some impact on the runaway 8 percent per year price increases under the previous Labour Government.

    ______________________________________________________________________________

    Penny Bright

    ‘Anti-corruption/anti-privatisation’ campaigner

    2013 Auckland Mayoral candidate

Recent Comments

Recent Posts

  • NZ announces a third P-3 deployment in support of UN sanctions
    The Government has deployed a Royal New Zealand Air Force P-3K2 Orion (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea, announced Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark. “New Zealand has long supported ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Pacific trade and development agreement a reality
    Pacific regional trade and development agreement PACER Plus will enter into force in 60 days now that the required eight countries have ratified it. Trade and Export Growth Minister David Parker welcomed the announcement that the Cook Islands is the eighth nation to ratify this landmark agreement. “The agreement represents ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Securing a pipeline of teachers
    The Government is changing its approach to teacher recruitment as COVID-19 travel restrictions continue, by boosting a range of initiatives to get more Kiwis into teaching. “When we came into Government, we were faced with a teacher supply crisis,” Education Minister Chris Hipkins said. “Over the past three years, we ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Border exceptions for a small number of international students with visas
    The Government has established a new category that will allow 250 international PhD and postgraduate students to enter New Zealand and continue their studies, in the latest set of border exceptions. “The health, safety and wellbeing of people in New Zealand remains the Government’s top priority. Tight border restrictions remain ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • First COVID-19 vaccine purchase agreement signed
    The Government has signed an agreement to purchase 1.5 million COVID-19 vaccines – enough for 750,000 people – from Pfizer and BioNTech, subject to the vaccine successfully completing all clinical trials and passing regulatory approvals in New Zealand, say Research, Science and Innovation Minister Megan Woods and Health Minister Chris Hipkins. ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • International statement – End-to-end encryption and public safety
    We, the undersigned, support strong encryption, which plays a crucial role in protecting personal data, privacy, intellectual property, trade secrets and cyber security.  It also serves a vital purpose in repressive states to protect journalists, human rights defenders and other vulnerable people, as stated in the 2017 resolution of the ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Ministry of Defence Biodefence Assessment released
    The Ministry of Defence has today released a Defence Assessment examining Defence’s role across the spectrum of biological hazards and threats facing New Zealand. Biodefence: Preparing for a New Era of Biological Hazards and Threats looks at how the NZDF supports other agencies’ biodefence activities, and considers the context of ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020
    New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020 Hon David Parker’s response following Thomas Piketty and Esther Duflo. Good morning, good afternoon, and good evening, wherever in the world you might be. I first acknowledge the excellent thought provoking speeches of Thomas Piketty and Esther ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Kaipara Moana restoration takes next step
    A Memorandum of Understanding has been signed today at Waihāua Marae between the Crown, local iwi and councils to protect, restore and enhance the mauri of Kaipara Moana in Northland. Environment Minister David Parker signed the document on behalf of the Crown along with representatives from Ngā Maunga Whakahī, Ngāti ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Zealand and Uruguay unite on reducing livestock production emissions
    Agriculture Minister Damien O’Connor and Uruguayan Minister of Livestock, Agriculture and Fisheries Carlos María Uriarte have welcomed the launch of a three-year project that will underpin sustainable livestock production in Uruguay, Argentina, and Costa Rica.  The project called ‘Innovation for pasture management’ is led by Uruguay’s National Institute of Agricultural ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • 3100 jobs created through marae upgrades
    Hundreds of marae throughout the country will be upgraded through investments from the Provincial Growth Fund’s refocused post COVID-19 funding to create jobs and put money into the pockets of local tradespeople and businesses, Regional Economic Development Minister Shane Jones and Māori Development Minister Nanaia Mahuta have announced. “A total ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Health volunteers recognised in annual awards
    Health Minister Chris Hipkins has announced 9 teams and 14 individuals are the recipients of this year’s Minister of Health Volunteer Awards.  “The health volunteer awards celebrate and recognise the thousands of dedicated health sector volunteers who give many hours of their time to help other New Zealanders,” Mr Hipkins ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community COVID-19 Fund supports Pacific recovery
    The Minister for Pacific Peoples, Aupito William Sio says a total of 264 groups and individuals have successfully applied for the Pacific Aotearoa Community COVID-19 Recovery Fund, that will support Pacific communities drive their own COVID-19 recovery strategies, initiatives, and actions. “I am keen to see this Fund support Pacific ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community benefits from Māori apprenticeships
    Up to 50 Māori apprentices in Wellington will receive paid training to build houses for their local communities, thanks to a $2.75 million investment from the Māori Trades and Training Fund, announced Employment Minister Willie Jackson today. “This funding will enable Ngāti Toa Rangatira Incorporated to provide its Ngā Kaimahi ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Training fund supports Māori jobseekers
    Rapidly growing sectors will benefit from a $990,000 Māori Trades and Training Fund investment which will see Wellington jobseekers supported into work, announced Employment Minister Willie Jackson today. “This funding will enable Sapphire Consultants Ltd. to help up to 45 Māori jobseekers into paid training initiatives over two years through ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ruakura Inland Port development vital infrastructure for Waikato
    The Government is investing $40 million to develop an inland port at Ruakura which will become a freight super-hub and a future business, research and residential development for the Waikato, Urban Development and Transport Minister Phil Twyford, and Māori Development Minister Nanaia Mahuta announced today. The funding has been has ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Appointments made to Defence Expert Review Group
    Defence Minister Ron Mark announced today the establishment of an Expert Review Group to review a number of aspects of the New Zealand Defence Force’s (NZDF) structure, information management and record-keeping processes.  The Expert Review Group’s work arises out of the first recommendation from the Report of the Government’s Inquiry ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • No active community cases of COVID-19
    There are no active community cases of COVID-19 remaining in the country after the last people from the recent outbreak have recovered from the virus, Health Minister Chris Hipkins said today. “This is a big milestone. New Zealanders have once again through their collective actions squashed the virus. The systems ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Clean energy upgrade for more public buildings
    More public buildings will be supported by the Government to upgrade to run on clean energy, the Minister for Climate Change James Shaw announced today. Minister Shaw announced that Lincoln and Auckland universities will receive support through the Clean-Powered Public Service Fund to replace fossil fuel boilers. Southern, Taranaki, and ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Schools back donations scheme for the second year
    More schools have opted in to the donations scheme for 2021, compared to 2020 when the scheme was introduced. “The families of more than 447,000 students will be better off next year, with 94% of eligible schools and kura opting into the scheme,” Education Minister Chris Hipkins said. “This is ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ruapehu cycle trails gets PGF boost
    The spectacular Mountains to Sea cycle trail in Ruapehu District will receive $4.6 million in funding from the Provincial Growth Fund for two additional trails, Regional Economic Development Minister Shane Jones announced today. “This is an exciting development for the local community, and one that will provide significant economic opportunities ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Update to air border order strengthens crew requirements
    Additional measures coming into effect on Monday will boost our defence against COVID-19 entering New Zealand through the air border, Health Minister Chris Hipkins said today. “As part of our precautionary approach and strategy of constant review, we’re tightening the requirements around international aircrew,” Chris Hipkins said. The COVID-19 Public ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • A true picture of Māori business activity
    A better picture of the contribution Māori businesses make to the economy will be possible with changes to the way information is collected about companies and trading enterprises. Māori Development Minister Nanaia Mahuta and Small Business Minister Stuart Nash have announced a new option for Māori enterprises who are part ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • PGF funding for Taranaki projects
    The South Taranaki museum, a New Plymouth distillery and a Pasifika building firm will benefit from a Government investment totalling more than $1 million, Regional Economic Development Minister Shane Jones says. The $1.05m in grants and loans from the Provincial Growth Fund (PGF) will help the recipients expand and create ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Fijian Language Week 2020 inspires courage and strength during COVID-19 pandemic
    The Minister for Pacific Peoples, Aupito William Sio says the theme for the 2020 Fijian Language Week reflects the strong belief by Fijians that their language and culture inspires courage and strength that is strongly needed in times of emergencies, or through a significant challenge like the global COVID-19 pandemic ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Trades training builds on iwi aspirations
    An investment of $2.025 million from the Māori Trades and Training Fund will support Māori to learn new skills while making a positive difference for their communities, announced Employment Minister Willie Jackson today. “K3 Development Limited Partnership will receive $2,025,000 for its Takitimu Tuanui apprenticeship programme, which will support the ...
    BeehiveBy beehive.govt.nz
    3 weeks ago