Proposed sale of energy assets “treacherous”

David Parker

It is unlikely emotional submissions about affordability, climate change and asthma will have much impact on the government's plan to sell off 49% of state owned energy suppliers.

Labour’s David Parker told NBR ONLINE that despite "compelling evidence" New Zealand’s deficit will increase as a result of the sale and the price of electricity for the average household will increase by an additional $265 per annum, the sales will go through.

“There is wide spread opposition to the sale, but this is the central part of government’s economic agenda. They need to see assets, like farms and state owned enterprises to settle our protracted account deficit. Despite the evidence this plan won’t address the problem, there are pretty weathered to this one as they don’t have any other plans,” he says.

The select committee dealing with the mixed ownership model, which heard 33 of hundreds of submissions on Tuesday, would see the government sell a minority of shares in Genesis Power, Meridian Energy, Mighty River Power and Solid Energy.

If passed, the new legislation will restrict the Crown from holding less than 51% of the voting rights in each of the companies and will restrict non-Crown individuals and entities from holding more than 10% of the voting rights in each.

The government wants to move these companies to the mixed ownership model to raise $5 billion to $7 billion, which the Crown says it will invest through the Future Investment Fund in new schools, hospitals, roads and rail and other public assets to control debt.

However, while the government argues the model will give New Zealanders an opportunity to invest in the market in large New Zealand companies, emotional submitters have said the prospective sales are “tantamount to treachery”

“It’s absolutely ludicrous that in our country a group of 61 people can make decisions that have serious implications for the future of our country and our children futures and our land,”Ariana Paretutanganui-Tamati told the finance and expenditure committee

The People’s Power Ohariu member’s comments were met by thunderous applause from the public gallery.  

Fears the sale will compromise the ability to determine pricing structure of energy delivery as a result of the Trans Pacific Partnership Agreement (TPPA) is one of the biggest concerns.

“A quarter of our children are living in poverty at the moment and have severe health implications because their parents cannot afford to heat terribly run down state houses,” says Ms Paretutanganui- Tamati, adding that if private companies are in control, prices would soar.

In an orchestrated effort, the Labour Party and the Greens encouraged concerned members of the public to make their submissions against the bill via their websites.

As of April 13, 600 submissions had been registered, most of them oppose the sales.

Concerns were also raised about the impact to climate change if the deal goes through.

Wellington orthopaedic surgeon Russell Tregonning says he is concerned for the future of his grandchildren, should the bill be passed.

“They stand to suffer from climate change, not me. This bill threatens the climate, it threatens New Zealand’s credibility overseas and is undemocratic,” he says.

He says the short term economic gains may cause long term costs for New Zealand tax payers and that the partial privatisation of state assets, here and internationally was usually the prelude of full privatisation.

“Such would see us lose control of our energy production. We depend on our clean, green image to sell agriculture and tourism,” he says.

Future generations will never be able to regain control of essential assets, the removal of social obligations under partial sale means poor people who can't afford to pay their bills will be in an even worse position than they are now.

Environmental protection will be eroded as shareholders seek high profits, the sales are a one-off cash grab by the government and the money will soon disappear.

The submissions continue.

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17 Comments & Questions

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We are doomed - Key is an appeaser (and we all know where those types ultimately lead). NZ is broke and the one abundant resource we have that can be profit maxed to spend elsewhere is electricity. The existing model is useless with so much duplication and inefficiencies that its no wonder the ultimate consumer is screwed yet we have alarmist talk from a few about waffly reasons such as climate, so no wonder we / they will be ignored.
The solution is simple. Single state ownership with an iron clad constitution and management by the best found through international advertisement to deliver energy to every citizen and kiwi business for the least cost and price while maintaining and improving production and delivery. We all win.

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Dido.

I have been advocating a single entity to distribute energy to the masses for some time.

Most world wide companies have been aggregating business, to achieve efficiency and economies of scale for some decades; yet this government is doing the complete opposite?

And just who is the government? If you ask me, its a handful of MPs with large business interests, rather than the wider people.Most of the rest of MPs are just ass lickers and followers.

If I was the opposition, I would be going to extra lengths to dig some dirt on the main players in the sale of these state assets. Key & Joyce, which clearly have no conscience, integrity, are greedy and will sell their family to get what they want.

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Agree fully.

The issue isn't only the liquidation mentality of this government (or Helen's), the issue is also who benefits.

Yet there doesn't seem to be a single journalist left who is prepared to do their duty to democracy and do some real digging into who is really benefiting and how much.

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Hey anonymous, right on the button my friend, I've been banging away with that exact scenario in these comments sections for the past couple of years virtually everytime there is a story on this and your comment is the first time I have ever seen anyone endorse the obvious common sense way to run our power generation and distribution in little NZ and anyone who can't see that is plan thick... well done hopefully the start of something.

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How dare you criticise John's plan to liquidate 49% of our power assets. How else are his Chinese friends supposed to have a chance at stripping those assets? How else are party cronies supposed to get their cut facilitating the sales? How dare you oppose enriching China's middle class while Kiwi Mum's and Dad's flee to Aus. You people just have no idea how much hard work goes into having no stakeholder focus whatsoever. You should be grateful that we're soon to leave the OECD. What the hell is wrong with you al.

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What perceptive comments. State ownership of power companies will lead to cheaper prices just as state ownership of supermarkets, factories and farms did for Russia and China.

Or have these people just arrived from another planet?

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You obviously don't remember or, haven't heard of the NZED??... You know, that Govt owned department when we once had the 2nd/3rd highest living standard in the world? Power generation is the only commodity that should be 100% owned by the Government. Electricity reform has been the single, biggest factor (together withour tax regime) which has for ever and a day, stuffed the NZ economy

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"a single entity to distribute energy to the masses for some time" - sounds like what happened to russia and china in the red star communist days.

That economic model didnt work for them for the obvious reasons. Even they know it now. It's too darn inefficient.

All you left wingers are willing to re-brand old unworkable ideas into something 'fresh' and 'appealing to kiwi mum and dads' at the expense of the country.

labour supporters are communist by stealth.

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I'm certainly no left winger, quite the opposite in fact. Probably without exception, NZ's entire power generation facilities and distribution grid, has been paid for off the sweat of the NZ taxpayer. Ownership should have been retained in perpetuity by the people of NZ . Instead, we've been shafted by all and sundry, with the reforms all but killing off the majority of NZ manufacturing industry.

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Selling of assets should not be a National or Labour Party issue. The proposal to sell income generating assets is just bad business.
Sure, if they were loss making, or needed heavy investment to keep them going, let them go.
But to cash up for short term gain and long term loss is just crazy.

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it's great liarbour decry the cost of power. wasn't it liarbour who ignored wide advice provided, on the rise to power of the ETS... who were then the loudest noise promoting such a rise in power prices (as a result of the scame)? and then said nothing when the other labour (national) who implemented it and have caused an effect rise in power of $ 9.23, per week (for the "average" family??

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You know you have those troughers with vested interests rattled such that they call some of us who are so right wing in our lives and businesses, 'communists' just for wanting an efficient energy price supply which the present smoke & mirrors totally fails.
Bring back Rodney I say !

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it's bloody rich for David Parker to predict increased electricity prices under a mixed ownership model, when Labour increased electricity prices more than 70% when they were last in power, and in control of the electricity SOEs. Most of those electricity price increases went into dividends to the Government. Just more taxes imposed by Labour.

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1990 williamson said he would resign if scraping the med and setting up all the differant supply companies cost us extra . well it cists heaps more and he is still there. along came the cable failure auckland cbd and guesse what no cable joiners in nz why because the private supply companies got rid of all the power boards and just took the profits no maintanance . its plain to see today we get a storm and people are with out power for several weeks in some places un heard of in the 60s 70s 80s then greed came to play so the politicians of that era joint hands with the big corperations and have being stealing our childrens heratage ever since, douglas banks hyde williamson clark mcully and pleanty more are still there along with the pedofiles mate brash ex christian heratage party caples friends . wake up kiwis

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sorry missed duns name the proggresive is or capels lot in disguise

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Given Shearer et al are UN shills and supporters of UN Agenda 21, I think we know everything we need to about their eugenic approach to energy.

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Remember all those of you ,mostly annymous no name posters, who oppose these asset sales on the usual misplaced ideologies , that the Crown will retain majority control. Read a letter in today's DomPost giving the reasons why NZ needs to do this.

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