Tuesday, 21 May 2013 15:06

Power plan will bring affordable electricity

Written by 

PLANS BY Labour to slash household electricity prices have been criticised by some in rural sector. 

 

An article in Dairy News April 30 by Mark Warminger, an asset manager, claims the policy will cost New Zealanders. He’s wrong. Federated Farmers spokesperson Anders Crofoot claims the policy is “suspicious”. I’m not sure where he gets that idea from.

Our proposal is about protecting New Zealanders from rampant profits in a monopolistic commodity that is currently controlled by an ineffective and unworkable electricity market. The Bradford reforms of the 1990s have proven, as with the unregulated finance markets, and an unregulated health and safety environment, to be an abject failure. 

Labour, along with the Greens, believes a major change is required to ensure New Zealand electricity users – business and residential – have access to reliable and affordable electricity. 

An Electricity Commission report revealed electricity companies made a $2 billion profit in 2008. That money came courtesy of consumers – such as pensioners who take to their beds early in winter because they can’t afford to keep their heaters on.

And yes, much of it went back to taxpayers through dividends to SOEs. But, to continue with the same faulty market when a large portion of generation capacity is to be sold to investors is to hand over monopolistic rights to a few select wealthy shareholders.  It is highly likely those shares will end up in the hands of foreign investors and, once again, New Zealand businesses and consumers will be paying more than they should to bolster profits for foreign investors.

The rural and agricultural sectors are increasingly reliant on electricity for farm production, processing of raw materials and for other industry services. Any increase in cost will be borne by farmers and reduce their incomes. 

Despite knowing the vast majority of its members will be beneficiaries of the new policy Federated Farmers has chosen to blatantly oppose the policy.  

While asset managers and traders like Mark Warminger might have to forgo some opportunities under the proposal, Labour believes the provision of electricity is a core part of this country’s productive sectors’ infrastructure and should not be rorted for excess profits. 

Labour also believed it was important to clearly notify the market and potential investors of plans to create one electricity purchaser for people who might be considering investing in the sale of shares in the SOEs. We did that. We were open and honest about a policy intended to benefit New Zealanders and every consumer of electricity, including farmers and rural business.

• Damien O’Connor is Labour’s primary industries spokesman.

Featured

MPI: Primary sector exports hit record $60B

A blockbuster year and an exciting performance: that's how Ministry for Primary Industries (MPI) Director General, Ray Smith is describing the massive upsurge in the fortunes of the primary sector exports for the year ended June 2025.

National

Machinery & Products

Farming smarter with technology

The National Fieldays is an annual fixture in the farming calendar: it draws in thousands of farmers, contractors, and industry…

RainWave set to cause a splash

Traditional spreading via tankers or umbilical systems have typically discharged effluent onto splash-plates, resulting in small droplet sizes, which in…

» Latest Print Issues Online

Milking It

Misguided campaign

OPINION: Last week, Greenpeace lit up Fonterra's Auckland headquarters with 'messages from the common people' - that the sector is…

Fieldays goes urban

OPINION: Once upon a time the Fieldays were for real farmers, salt of the earth people who thrived on hard…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter