The Daily Blog Open Mic Saturday 11th April 2015

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openmike

 

Announce protest actions, general chit chat or give your opinion on issues we haven’t covered for the day.

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  1. Here is what has happened to our “once proud secure cheap state owned power system.” where we had one of the cheapest most secure supplies in the world.

    Happy Birthday Winston on your 70th birthday today.

    Author:
    Rt Hon Winston Peters

    Date:
    Tuesday, May 27, 2014 – 13:00

    Dunedin Public Meeting
    Tuesday 27 May, 1pm
    South Dunedin Community Hall, King Edward St, South Dunedin

    The electricity and retail power sector in New Zealand has become utterly dysfunctional.

    Looking for logic in the New Zealand electricity sector is like looking for unicorns!

    In fact if anyone claims there is any logic to the way the New Zealand electricity sector is run they are either mad or one of those whose pay depends on the current structure.

    The Chief Executive of Mighty River Power’s total remuneration in the 2013 financial year was $1.3 million. And he was not the only chief executive well above the $1 million a year prevailing benchmark for the energy sector.

    They are the tip of an iceberg of management – with well over a thousand managers in the electricity industry getting over $100,000 a year.

    And then of course there is the pay for those who sit on the boards.

    There is now an air of complete unreality about the power sector.

    As prices are constantly hiked there is a sick attempt to convince the public that this is somehow the result of a ‘market’.

    As we all know, New Zealand has suffered grievously from the ‘free market’ model inflicted on New Zealand by Rogernomics and subsequent National governments.

    The mantra that everything has to conform to a competitive market was allowed to permeate all aspects of the economy including the electricity sector.

    Prior to this self-serving madness taking hold, New Zealand had a world class electricity system run by the state as a natural monopoly. Under this system, duplication of generation and transmission was avoided and costs minimised.

    If you are going to have a monopoly, it is preferable that it be a state monopoly because at least a state monopoly can be made responsive to the taxpayers.

    Today, the so called ‘electricity market’ exists only in the imagination of National Ministers – aided and abetted by the hundreds of managers and consultants who now gorge on the revenues looted from the public by way of electricity prices.

    The spin and misinformation coming out of the electricity industry and Government is Kafkaesque in its absurdity.

    What is patently clear is that thanks to misguided government policy, the electricity industry has become a self -serving structure that has imposed massive costs and delivered few benefits for New Zealand.

    The electricity industry has turned into a gravy train of epic proportions at the expense of the public.

    The government has also been helping itself to the public trough that is the electricity sector. In Parliament in March it was revealed that the government itself had extracted $610 million in dividends from Transpower alone since 2011.

    This is a staggering sum and a stealth tax by any other name.

    The electricity sector is now a baffling, bewildering, unfathomable mess with a myriad of quasi-monopolistic organisations and a regulatory body – the Electricity Authority – that simply rationalises and rubber stamps the status quo.

    All this is perfect camouflage for justifying price hikes. Does the Electricity Authority serve any constructive use in holding down power prices? Clearly not – it should go!

    In fact, New Zealand has moved from having relatively low electricity and power prices, when the system was run by the Electricity Department in the so-called bad old days, to some of the highest prices despite having the superb comparative advantage of significant hydro power as a source of sustainable generating capacity.

    The electricity sector is a basic element of our infrastructure. It should exist to serve the public and underpin the economy.

    Instead, thanks to National’s free market ideology it has been turned into a rapacious leach that is feasting on all New Zealanders, businesses and homes.

    The chronic state of the New Zealand electricity sector demonstrates the extent to which the National Party and its mates and cronies in the business elite have disconnected from reality and are now in a conversation only with themselves.

    Given the manifold failures, it is clear New Zealand has taken the wrong direction with the electricity sector.

    What is an essential part of the national infrastructure has turned into a way of gouging the public. As a first and necessary step in bringing sanity and stable prices back to the electricity sector, New Zealand First will bring Meridian, Mighty River Power and Genesis back into full state ownership.

    New Zealand First is committed to buying back the shares of the state owned energy companies sold by this National Government.

    The power company floats were an insult to the public – selling back to two per cent of the public what generations of Kiwis had already paid for and benefited from.

    Those sales were a direct attack on the investment and savings strategies of many generations and former governments that had the wisdom and sagacity to build these great assets in the first place.

    Crudely these sales are an admission that there are many politicians who can’t stand to have their privatised ideology results compared unfavourably to an ideology that says the people and their governments can build to everyone’s advantage, and owned by everyone, great state assets.

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