Why Brian Gaynor wants you to keep paying too much for power

34 comments on “Why Brian Gaynor wants you to keep paying too much for power ”

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1. Yorick 1

   2 May 2013 at 8:13 am

   Thanks for that, Eddie.

   I had wondered who this self-important economic savant was who had suddenly
   popped up in the NZ media. I can see why Brierley had no time for him ..

   We need more critical populist economics in this vein.

   Perhaps you can explain to us who this fella John Key is ..
2. One Anonymous Knucklehead 2

   2 May 2013 at 8:16 am

   From an investment perspective MRP looks like a good buy if you ask me. NZ Power will still leave room for profits to be made, population growth will help demand. If they manage to avoid having a bunch of debt-happy wingnuts on the board future prospects look good.

   Once the Greens’ home insulation policy reaches saturation point let’s subsidise the installation of wind and solar-based domestic power generation.
   • vto 2.1

     2 May 2013 at 8:29 am

     I like the way the investment gurus make no mention about how NZ Power effectively guarantees profits for the generators.

     I like the way Brian Gaynor encourages collective ownership in his very own business yet espouses an entirely different creed when it comes to investments which he earns a commission from.

     I like the way Mighty River Power intends to pay out over 100% of profit to its shareholders in the future. Dont the government and investment advisers listen to their own advice? Or does Gaynor earn commissions on the trade of shares.

     I like the way that debt is intended to ramp way way up shortly, in order to pay out over 100% of profits. Dont the government and investment advisers listen to their own advice? Or does Haynor earn commissions on the trade of shares.
   • Yorick 2.2

     2 May 2013 at 8:30 am

     So you advocate a long-term buy and hold strategy for the Mums and Dads of the nation ?

     Would the closure of an aluminium smelter in Bluff have any impact ?

     Interesting timing .. the hunters are out there chasing the stags.

     🙂
     • One Anonymous Knucklehead 2.2.1

       2 May 2013 at 8:35 am

       No. I’d advocate that Mum ‘n’ Dad get out on the streets and get rid of this crap government, and failing that, donate the share float cash to the left wing political party of their choice.
   • Colonial Viper 2.3

     2 May 2013 at 8:32 am

     Yeah but these capitalist privateers don’t want a steady return over time, they want a reliable risk free oversell and price ramp on launch, which enables them to make a quick one day 15% pump and dump profit.

     Then they can go on holiday the rest of the year having achieved a whole years returns for the fund in just one day.
     • One Anonymous Knucklehead 2.3.1

       2 May 2013 at 8:37 am

       Yep, looks good from the pump ‘n’ dumper perspective too, if you can stomach it.
3. Colonial Viper 3

   2 May 2013 at 8:39 am

   You gotta admire these capitalist commentators for unashamedly pushing for even more profits for their moneyed constituencies.
   • geoff 3.1

     3 May 2013 at 7:51 am

     In for a penny in for a pound!
     They’re like deranged killers on a shooting spree, once you’ve shot 5-6 people you may as well try and kill as many people as possible and break the record, right?
4. Paul 4

   2 May 2013 at 9:44 am

   Excellent series, Eddie.
   You’d never make the msm…you do too much research and don’t just repeat the company line!
   • Ben 4.1

     2 May 2013 at 12:42 pm

     +1000000
5. RJLC 5

   2 May 2013 at 10:21 am

   Strange, a year or so back I believe Gaynor was saying there was poor economic justification for the sale.
   • Lightly 5.1

     2 May 2013 at 10:54 am

     yeah, but he wasn’t looking at his profit opportunities then, eh?
   • lprent 5.2

     2 May 2013 at 1:11 pm

     I remember that as well. Don’t have time to track it down…

     But I guess that was when he was wearing his economist commentator hat rather than his Milford business hat.

     I have to say that this divergence of opinion does make me more worried about keeping my kiwisaver with Milford. I’ll have to explore the movement options.
   • Matt 5.3

     2 May 2013 at 1:23 pm

     Could it have been this, where Gaynor says asset sales will cause Kiwis to be serfs in their own country?

     http://www.interest.co.nz/rural-news/53180/selling-all-our-assets-makes-new-zealanders-serfs-our-own-country-says-brian-gaynor
6. grumpy 6

   2 May 2013 at 10:37 am

   I suppose energy prices have to come down…..otherwise the backlash from the Labour/Greens Carbon Tax will incur a permanent voter backlash………? Cynical – much?
   • millsy 6.1

     2 May 2013 at 11:17 am

     Didnt National keep a revised form of the ETS?
     • felix 6.1.1

       2 May 2013 at 11:21 am

       Yep under National’s ETS we all pay more except for the polluters who all pay less.

       Yet another National govt tax rise.
       • grumpy 6.1.1.1

         2 May 2013 at 12:00 pm

         So I take it that the Labour/Greens Carbon Tax will have no effect on energy prices?
         • One Anonymous Knucklehead 6.1.1.1.1

           2 May 2013 at 12:45 pm

           Do you? How absolutely fascinazzzzzzzzz
7. QIKB 7

   2 May 2013 at 12:00 pm

   “Well, Gaynor works as executive director and head for an outfit called Milford Asset Management – they manage investments for people with $300,000+ to invest and have pretty successful Kiwisaver and PIE setups. Gaynor heads their investments sections. The company notes that its workers own shares in the firm – Gaynor’s the largest shareholder, owning 24% of Milford.”

   A conflict of interest here, perhaps ?

   What is his record and background in Ireland ? There have been some interesting times there recently ..

   [lprent: I believe he discloses the Milford linkage at the bottom of his articles – at least he has when I have read his columns. ]
8. Nick 8

   2 May 2013 at 1:26 pm

   Why New Zealand Businesses and Power Users want to keep paying too much for power: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10881118

   Wait aren’t these the very people who were meant to benefit from the plan, employing 5000 more people because of lower prices etc?
   • karol 8.1

     2 May 2013 at 1:34 pm

     And an excellent quick and assertive response to the open letter by the Green Party:

     “The Greens make no apologies for wanting to get power prices down to a fair level. Business New Zealand and National seem to think that electricity companies’ profits matter more than lower power bills for families and businesses….

     “It is a shame that Business New Zealand and National want to protect the broken electricity market, which has led to massive power price rises. Families and businesses are welcoming our plan for change that will fix the broken system and replace it with a proven system that will deliver lower power bills.

     “Hyperbolic claims about capital flight and wealth destruction do not impress us or add nothing to the debate. NZ Power will lead to a wealth transfer from the electricity companies who have been making excessive profits to families and businesses who will pay less for power. It will create wealth by removing what is effectively a stealth tax on the economy, leading to healthier families and more jobs.

     “The Greens are a democratic party and we won’t have our policy choices dictated to us by big business. We will make our policy choices based on what is best for New Zealand, its people, its economy, and its environment. NZ Power fits the bill,” said Mrs Turei.
     • Nick 8.1.1

       2 May 2013 at 1:40 pm

       Yes but don’t you see that the whole premise of this bizzare series of attacks on anyone who opposes NZ Power has now been laid to ruins? You can say that anyone who opposes the idea must have some sort of sinister selfish reason to do so only up to the point where the very people who are supposed to benefit from the policy say they oppose it.

       It’s all very well to assert that NZ Businesses want to ‘protect the broken electricity market’, but if they are the people who will benefit from it being fixed why the hell would they do that? Answer: NZ Power will make it worse
       • karol 8.1.1.1

         2 May 2013 at 1:46 pm

         Say what?
       • lprent 8.1.1.2

         2 May 2013 at 1:53 pm

         NZ Power will make it worse

         Unlikely and it can hardly get worse than the rampant power price inflation has already made it. There isn’t a sound economic reason for the price rises that we’ve had since Bradford broke up the sector.

         Eddie is simply pointing out that the more vocal supporters of the current government’s asset sales plans have good reasons for supporting it and for opposing NZ Power. To date it has been hard to find a articulate and knowledgeable supporter who does.

         What this whole debate is steadily clarifying for me is how good the case is for shutting down the NZ stock exchange. The whole power selloff exercise appears to be being done purely for the benefits of broker’s commissions in defiance of any economic benefit for NZ.

         And the NZX will at the end of it will still be completely useless at providing it’s primary function – distributing capital for economic benefit of our society. We’d be better off raising capital in aussie where the market is bigger and the brokerage system is a lot less incestuous.
       • Mary 8.1.1.3

         2 May 2013 at 2:44 pm

         I’ve just spent the last twenty minutes working out a line-by-line critique of your comment to show how non-sensical it is. I thought that dissecting it and then commenting on each element would be useful for the purpose of pinpointing precisely why what you’re saying is illogical and, in this case, likely to be ideological driven. I stopped at the point where I realised that not only is what you say completely illogical, probably not worth responding to although of course I have anyway and definitely ideologically driven, but written by someone who doesn’t have a single clue about what they’re talking about. Sorry about that but it just turned out that way. Cheers anyway.
         • Nick 8.1.1.3.1

           2 May 2013 at 8:33 pm

           You must feel so clever, having published a 7 line comment which fails to make a single argument
           • geoff 8.1.1.3.1.1

             3 May 2013 at 10:09 am

             It’s all very well to assert that NZ Businesses want to ‘protect the broken electricity market’, but if they are the people who will benefit from it being fixed why the hell would they do that? Answer: NZ Power will make it less beneficial for them than owning the shares of cartel power companies

             FTFY
           • Mary 8.1.1.3.1.2

             4 May 2013 at 4:36 pm

             Funny that. I thought my comment said precisely the same thing about the meaningless words you posted.
   • Lightly 8.2

     2 May 2013 at 2:31 pm

     Check who are members of Business NZ

     Contact
     Genesis
     Meridian
     Mighty River
     Transpower

     All five!
9. anon 9

   2 May 2013 at 1:52 pm

   Milford Asset offer a premium product for investors with over 300K, but the minimum amount required to invest in their PIE funds is 10K.
10. Poission 10

    2 May 2013 at 2:16 pm

    the obvious problem here is that the inverse commentators on Power NZ policy are Turkeys ie What do you think of XMAS?

    Business NZ has proved that it is driven by factions without thought to the greater good of its members eg higher prices reward a small group and disenfranchise the producers( people who make and sell things)

    NZ is one of the only countries in violation of Rosenfeld’s law .

    https://en.wikipedia.org/wiki/Rosenfeld%27s_law

Links to post

1. The Daily Blog Watch Thursday 2 April « The Daily Blog: posted on 2 May 2013 at 8:11 pm

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