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COMMENT: Why the Greens 'Hey, Clint' moment matters

Has any multi-billion dollar policy ever been made with such an air of frivolity as the Greens/Labour parties' power plan?

The plan – which would involve interposing a government-run wholesaler into the market to set prices – shaved several hundred million dollars off the value of electricity market companies, taking investors in the New Zealand sharemarket by surprise, if not shock.

It has to be one of the most expensive branding exercises in this country's history.

For that is all it is.

The entire purpose of the exercise is to brand the Greens and Labour as distinct from the present government – and also as distinct from the last Labour government.

There is even a neat little distinction, at the detail level, between their two power plans, so as to allow them to brand themselves as different from one another.

You and I are paying for this branding exercise through the cut in value of taxpayer-owned companies in the electricity sector.

Those who invest in the private sector firms – either directly or through KiwiSaver accounts – are also paying for it.

Chilling effect

And that is the entire purpose of the Greens/Labour power plan. While it might deliver cheaper power prices in the short term, its chilling effect on private investment is going to cause higher prices over the medium to long term. 

There is something essentially frivolous about anyone who would cheerfully rip up the value of some of the country's largest firms, and the value of the investment in those firms, simply for a political positioning exercise.

This is why the exchange caught by TV3 between Green energy spokesman Gareth Hughes and party spin zambuck Clint Smith was so telling.

For those who missed it, Mr Hughes was asked if the party was pleased at the reaction: Mr Hughes paused, turned to Mr Smith and asked "Hey, Clint – are we pleased?"

It was telling that he even had to ask.

But the almost palpable glee coming out of the Green and Labour camps at the destructive impact of their policy is highly revealing. 

It underlines – not for the first time – the problem with the makeup of both parties. They are dominated at the MP and the staff level by the sub-genus homo politicus.

That is, they are full of people who have done nothing in their lives apart from politics. All parties have a complement of this group, but with Labour and the Greens the group has reached critical mass.

This group has been involved in politics at university, moved from there to various political/union offices and then into parliament. 

There is little real world experience and everything is viewed through a very narrow prism of political advantage.

It's the sort of attitude which means the value destruction seen this week can be just laughed off.

There will, unless we are careful, be more such frivolous policies to come.

More by Rob Hosking

Comments and questions
93

Totally agree

What a frivolous branding exercise that article was. Designed to rip up the value of one of the country's largest political parties. Written by one of the sub-genus, homo politicus, who have done nothing in their lives apart from politics. The sort of attitude which means the value destruction seen this week can be just laughed off.

Crawl out from under your rock, little ocean creature, and show your face so those you are insulting can see your political colours and judge them accordingly.

Yeah and crawl back under yours creep, the arrogance of your reply is massive... so we can judge... who the f@#k do you think you are?

Alan, can't you work Ocean Crawlers political colours out by the tone of the comment? Your rage against the world is dulling your senses. Have a glass of milk and just breathe.

Nope, I want to know if he works for the pale reds, or the red Greens. No rage against the world - I enjoy my little world, thanks.

Well you're right about it being a little world for you - there's only you in it!

I guess you and the Left know as much about that as anything else - nothing.

The article is bang on as Hellen was a career budging politician just like the deadbeats in Gweens and Liaboure.

We love the stories that paint a good light on NZ's standard of living. Economic growth is based on targets and achievement. Many miss the targets (and wear the cost) but - a successful country celebrates and encourages achievement. The LabourGreen representatives, for the most part, have never been subjected to GDP/commercial growth goals. In fact, commercial achievement is considered to be at the expense of the "workers" - forgetting the many entrepreneurs who have failed. The LabourGreens are incapable of bettering NZ. Their mantra is to deride those who achieve the mark that we should expect from our elected officials.

National brought this whole sorry debacle upon us all, as predicted, by going ahead with the deeply unpopular asset sales. They did not have a mandate (36% of eligible voters voted National at the last election) despite their spin. They didn't hold a referendum. They went ahead anyway. The wealth destruction people are blaming Labour and the Greens for can be blamed squarely on an inept, undemocratic National Government decision to ignore the will of the majority of the people.

Keep this in mind when the fracking pollutes underground waterways, they strip mine the West Coast sea bed and they start mining our conservation estate. The division and violence that will come will be also squarely upon National heads. It is going to happen as surely as this mess over selling state-owned assets.

Pathetic response. LieBore sold 9.5 billion dollars of state assets when they were in the cockpit...not a bleat from any of the LieBore anti-sales cretins then.

Presumably you are talking about Labour under ACT mps Roger Douglas and Richard Prebble's influence. If so the party was split. Jim Anderton left and Labour got chucked out of government. Or do the facts spoil your story? Asset sales will ruin national too.

Let's not forget that Labour sold control of the assets. This programme proposes to sell only part and to retain a controlling interest. That is quite a big difference and it does get glossed over. NZ retains control and majority ownership.

Labour and the Greens have caused a massive drop in the value of all generators, including MRP. They have also almost certainly ensured a larger percentage will be purchased by offshore investors. So the outcome will achieve exactly the opposite of what they have been campaigning for.
And do they care? Not a bit. They are thrilled to have thrown a spanner in National's works. Never mind what they've cost the country. Not that they will portray their delight. Oh no, they'll be crying and bleating 'we told you so'. They are a hypocritical lot driven by spite.
No doubt a few will be sucked in by the mention of a $6 per week saving. Hopefully, most will see it's not possible to just wipe over half a billion form the country's revenue without picking it from another pocket.

All generators? Nearly all are owned by us and the value you talk of is only relevant if you are one of the greedies expecting your socialised wealth transfer or have shares in contact of trustpower... Go cry.

Wanna go on a date? Meet you in the student union bar after the politics seminar x

Some child is a troll

You really can't connect the dots, can you? All NZers who have Kiwisaver just took a bath by the foolishness of the Labour/Green Axis of evil. We all lost money in our fund portfolios so that those buffoons can score a couple of political points and deny the democratic decision of the last election.The disrespect that Labour/Greens show the average kiwi is immense, and it will cost more in years to come.

Henrietta - everyone on the market knew the risks for MRP and any other energy participant, If they didn't they are extremely naive and shouldn't be in the market. The scaremongering from people opposing Labour/the Greens' plan has done as much, if not more, to cause the drop in value. Too much hysteria.

I don't doubt that this kite flying by a irresponsible Labour Party and Greens will cost the country many billions of dollars in lost investments. Right around the world the news has gone out that New Zealand is considering nationalising private assets, putting the fear of death into any new potential investments. Shame on these people.

Really Geoffrey? Gone out around the world? What makes you think that? Have you just been around the world? Why has the sharemarket hit new levels? Why hasn't the currency dropped? Why have I not seen any mention in overseas papers? Can you cite any proof of your claim? I doubt there is much awareness of Labour/Greens proposal outside of NZ at all. That's not to say there won't be if they ever enact these policies, but that's not the case yet.

Yes, really.

I think you mean AN irresponsible Labour Party - a victim of National's education policies perhaps?

I think both parties are to blame for the hopelessly low standard of English. 'A' has become the standard indefinite article; not just in writing, but also in speech if you listen carefully. Hopefully we'll see a rise in standards with charter schools. Our public schools have failed miserably in teaching the basics.

I don't blame our political parties for that, rather I blame our useless English teachers for not teaching our kids these very simple rules.

"An" is paired with words that start with vowels, an apple, an eye, an idiot, an overcoat, an underclass. For everything else it's an 'a' unless the consonant is silent and the next letter is a vowel such as an hour can be used.

I mean just how difficult can that be to teach? That's not a government's responsibility, left or right.

My kids can read and do maths, perhaps yours are just thick.

I shall instruct my teachers next term that the most important thing some NBR readers think they can learn while at school is English f#$%^&%$ grammar. We will immediately put on hold all efforts to teach children how to think, to be flexible, creative, adaptable, life-long learners. We will roam the aisles checking grammar all day. Unbelievable. If this is what supporters of charter schools think, god help our education system.

Ever tried to get a school leaver to write a letter? No? Thought not. You may think grammar is unimportant. Employers don't. Like it or not, we are judged by our speech. No point expecting school teachers to correct bad grammar; many of them haven't learnt English, either. Listen to talkback radio and you'll soon see the link between illogical thinking and poor grammar. It is worth noting that several surveys have shown a distinct relation between grammar, vocabulary and income. Some of the big corporations in the USA put new recruits through grammar courses before starting them on the job, and their school leavers are away ahead of ours to begin with. Let's not see that happen here.

You have to be a shill for the private school sector...as you're hardly a positve advertisement for the state!

You should be on Seven Days.

Pedant

"Right around the world the news has gone out' - evidence? proof?

You are posting on here using technology called the internet --that is how news like this travels rapidly around the world( in this case the investment world ). It was probably helped by a bit of twittering.

Where is the proof, any evidence at all, that it has gone around the world, or even the investment world? If it had the NZX would have dropped like a stone. As it so happens only energy stocks have been affected so far.

What a ridiculous article. 1 - this is not news, it provides no information, just a heavily skewed and unashamedly biased opinion. 2 - the fact that MP Gareth Hughes asked for clarification of whether "pleased" was the right word to describe the feeling of the party perhaps points out that "rip[ing] up the value of one of the countries largest firms" was not the goal of the policy announcement - investor reaction is probably not in forefront in the labour-green psyche, maybe they're just looking for a way to provide cheaper electricity...

Maybe they are just trying to get into power, by promising free stuff to some voters who continue to not look the gift horse in the mouth.

The above comments and the original article are typical for NZ-ders. All the focus is put on side-shows, like this single sentence between two people instead of the main point: is paying too much for electricity (or anything else) is good for this country and its people and how this can be changed. I am yet to see any rational reason against, supported by numbers as it was done in the original Labour/Green proposal.

If you want to know why it won't work read Rodney Hide's column here or the string of posts by David Farrar on Kiwiblog.

If you think the numbers in the Berl report mean anything beyond wild optimism you don't have any experience of assessing a business case.

Neither of whom have or will give an objective impartial analysis

A bit like National's Novapay Alan? Or Solid Energy? Or SCF?

For the record, Novopay was Labour's idea and National's implementation so, can't just blame one really...

Deki, funnily enough, its always hard to rebut a business case thats made up of incorrect information. Labour's claim of price gouging is backed up with the Wolak report. A report written in 2009, that has subsequently been analysed and shown to have used incorrect methodology and therefore come to incorrect conclusions regarding market rent pricing. Secondly, they claim massive price increases. Only under their government, 72% in actuality. Under National since 2009, adjusted for the GST increase and Labours nutty ETS scheme, prices have increased by roughly inflation.
There. Thats the facts. All available by googling if you choose. Conclusion: Labour creating policy with lies to the general public.

I think the author is too kind. I think the greens are just immature. The printing money idea the greens came up with is what a teenager would dream up with if you asked them about what they'd do if they were in politics. Maybe thats too unkind to teenagers.

To be fair to the Greens it probably took so much emotional energy to contemplate cutting down more trees to print the money they lost sight of the wood in the trees. Now were all lost. Is the wood in trees more valuable than money printed with it or does it depend on which party sanctions the print run?

The USA the UK and Japan are all printing money, you imbecile. No fish Bill English is the one acting like an immature teenage looking after his rich mates.

....pity this article is so biased otherwise it would probably be worth replying to explain how destructive National is ......

Why are we shocked with this lot? Helen and Michael left us with a black hole economy, plus a ball and chain when they BOUGHT the railway from the Aussies. When Labour knew they would lose the election, they applied what the Russians would called a scorched earth policy. And Helen had pre-purchased her new job at the UN.
The Greens are headed up by a failed Australian communist labour union member who came to NZ to try his game again.
Our secondary schools don't teach real world economics, the teachers union is aligned with Labour, and they do their best to poison young minds with their socialist agenda without ever declaring their interest.
How do we keep New Zealand as a great place to live and invest if we have idiots like Greens and Labour ever in government again?

In response to you question; Labour and the Greens are not idiots. They are political parties supported by more people than support National. This is what democracy looks like. This is what democracy feels like. If you are uncomfortable with this idea,could I suggest you move to a country like North Korea, where you would feel more at home. I am sure your superiority will guarantee a quick rise to leadership. Yes, NZ is a great place to live. It always has been and will be even better when people like you leave in droves after the next election.

Labour and Green parties are ghastly little authoritarian control freaks...look up the definition of ineptocracy. And from a leftist talking about North Korea....that's where it always ends up!

North Korea is a fascist state. You want socialist? Go to Finland.

Fascist state! As is always the way... when socialism is revealed at its most extreme then socialists in pre-socialists states bleat that they are fascist and not socialist... Stalin's Russia, N'th Korea, National Socialist Germany... Finland is interesting, though ... isn't that where the radical green nazis hail from?

You say NZ is a 'great place to live'. How so? In what way?

I think NZ is a great place to live personally and never need it explaining... But that's just me. Heard today on the radio, Spain has 26% official unemployed. Unofficially it will be much higher. Europe is a basket case, the UK about the same, the US is wounded and on one knee, but she'll stand tall again soon... No where else has it as good as NZ does. Not even Australia. Just check our OECD metrics... Have a read, then thank Key and National for firstly, being the government and not L&G over the last 5 years, then secondly for the great job stearing NZ through the GFC whilst fixing Christchurch at the same time. Then thank God for those last 2 again.

I find, It's not until you travel and have a basis of comparison first hand, that you can fully appreciate just how awesome we do have it here in NZ... Or how to really find your patriotism until you see the All Blacks play when away from home.

in reply to Solidarity - yes you do need to travel to compare NZ to other places. Having spent some time in Austria I now appreciate how grubby and poverty stricken we are in comparison.

OECD metrics, GFC, L&G, wow you know all the terms. NZ's growth strategy... sell assets, borrow 300 million a week for years on end and hope for a massive disaster to hit a New Zealand city every few years, yeah that's good.

300 hundred million a week eh? Borrowing very very bad for NZ Inc etc.

From memory, wasn't that when JK squewered Goof with that awesome call "Show me the money!" ? How will Labour pay for Christchurch to be rebuilt?

The best part though, was watching Goof swallow a rat and turd sandwich when pressed for a reply and he responded with:

Goof: "we would need to borrow more... But we'd pay it back at the same time as National"

The crowd goes wild... Hysterical laughter...

Debate eventually goes on.... Squewering continues...

The crowd goes wild... Hysterical laughter... Pity chuckles....etc

I am in solidarity with you over patriotism and loyalty. I think being good at producing stuff the world wants is what is keeping us afloat not the Government. I am very worried about the vast borrowing National is doing to keep the books looking ok. It is good to read a positive post from you.

Some economists are now forecasting Christchurch's rebuild to go from $30 to $40 Billion. Then there's the rest of NZ inc requiring R&M and usual OPEX etc.

OECD rankings, IMF praise... Compared to most elsewhere, the good ship NZInc is doing bloody well!

But there's definitely room for improvement. Governments role is to encourage that improvement... Not try and control it.

Thanks. That's why I find L&Gs sabotage last week so repulsive. Certainly there was no patriotism or loyalty to anyone with any kind of super fund or other investment.

How could decent Kiwis do such a thing to all of NZ for their own greed and twisted ideologies... Not what's best for NZ inc. But then, Norman's an Aussie.

If Comrad Auntie hadn't removed the sedition laws... Labour and the Greens wouldn't be able to commit mass fiscal sabotage and get away with it without some penalties/deportation for their actions.

No problem wiping a few bob off our retirement funds. Putting retirement up two years will mean you won't need as much.

...and then you go and ruin it all with ideological nonsence. If National had listened to the people and given up on the idea of selling our assets we would not be in this mess. Labour and the Greens are simply acting in the interests of all NZers rather than a select few. Selling the assets is unpopular and dumb. And now we all pay the cost of Nationals slow motion, monumental, train wreck of a blunder.

We are not in a mess, Spartacus. As a country we are doing brilliantly, thanks to good govt. NZ is extremely well positioned for an great future as long as the Labour Green parties don't get voted in.

Barbara, some are doing brilliantly but many aren't. You probably won't see that, and advocating a one-party state is crazy.

Ah alas, I see the positive moment was but a fleeting one.....

All I have heard so far is share prices have gone down but no one has ever talked about poor consumers who have been paying higher and higher electricity for a very long time. Voted National last time but not again

go bob

If all the power companies are government owned, then it is the government that is controlling the retail price and the profits. If Labour reduce the price of electricity they are effectively giving away their share of the profit and will have to either raise taxes or borrow to cover the gap.

The world is not coming to an end. It will still not come to the end with the election of a new Government.

But maybe someone will start to do something about power prices...

The points in this article are true - it is hard to deny.

Labour/Greens launched this idea purely to sabotage the sale process.

Fact - not proud to say but I worked as a pricing analyst at one of the state owned power companies during the Helen Clark years.

This was the period in which power prices outpaced inflation by the greatest margin.

Helen Clark was busy reallocating this money to those on the benefit.

If anything price growth has slowed in the last few years as the listed competitors doscount more aggressively.

With greater awareness of how easy it is to switch the importance of a competitive sector was never more important.

The Greens/Labour policy is socialism pure and simple and a frightening message that people are not safe to invest in New Zealand.

Correct these politicians do not understand that investment here means interesting jobs for our kids and dividends for our retirement.

Actually I love New Zealand but am genuinely getting scared about the direction of our country when I see lunacy like this.

This proposal is lose-lose. As majority shareholder the government wold only get lower dividends and invest less.

This would put infrastructure at risk and leave less to distribute to those in need (Russell please explain where the money will come from?)

And if they do not get their hair brained policy through they would have still spooked the market so the tax payer will end out if pocket after the partial sale process...

!!!!

Lord help us all if they get in.

hair brained!!! Try hare brained. Lord help us as you say......

I'm surprised that nobody has mentioned the benefit that businesses will get from having cheaper power. There are certain things that a government should run, infrastructure (incl Electricity) is an example. The only winners with privatised power are the shareholders. Electricity should be run as a non-profit enterprise. We can still invest in the infrastructure, the returns will come from business performing (and paying more tax) due to reasonable power prices.

So tell us, how much lower will the Greens allow the price to drop for industrial users? How will Labour and the Greens ever agree on this? And who will make up the shortfall in govt. revenue if not the productive?

Why don't you find out some facts before you rush to judgment? If residential customers pay less businesses will pay more. Investors will have run a mile so all new capacity will have to be paid from forcibly reduced profits so supply will become inadequate and unreliable. Most of the cost growth has been in the monopoly transmission sector which will be unconstrained thus placing even more financial strain on the generators. The only winners from this idiotic policy will be short-term politicians - who will be routed as soon as the real consequences eventuate - and bureaucracies which will grow as the economy shrinks.

Alan 'Fox News' Wilkinson is broadcasting again. Fancy having families affording to heat their homes, are you crazy? Hey, they don't invest and can't even say big share owning words like book building and disclosure and if they don't earn enough to pay the rort then really that's their fault. They deserve it because they are losers. Come on, Alan, say it, you know you really want to. Don't listen to him, Ken, it's the last gasp of the Rogernomics dinosaur.

Actually, Alan, I do know something about the electricity market that you all soon love. I have seen the peaks in prices that come from a market that has to be supplied, or there will be a blackout. Generators sitting ready to spin up once the spot price hits max. And all the suppliers waiting till it does. This is why we pay a premium for our power. Sounds like you need the education, and under National they will have you paying through the nose for that, too!

@Ken, why then do not prices continue to spiral upwards unrestricted? Why have prices stabilized under National after running amok under Labour? Why do commentators point out that residential prices were subsidised by commercial users prior to the Bradford reforms. Why did prices then fall until Labour took power in 2000 and started interfering again? Why would businesses not expect the Labour and Green politicians to buy votes by overcharging them to subsidise residential users again? Why would subsidised residential electricity not deliver huge windfall benefits to the wealthy with large houses, all heating and air conditioning mod cons, extravagant lighting and heated swimming pools? Why would cheaper power not lead simultaneously to increased demand and lower investment - and consequential failures of supply and delivery with huge impacts on businesses?

That's my education. What's yours?

But Alan, at the moment residential customers pay more and industry pay less. Who is winning at the moment? Tax the corporations so they pay their fair share I reckon.

So let's take this really slowly for you Alan. Labour / Greens will reduce the extortionate prices we pay for power. They will reduce prices for both residential and business consumers. There is NO corrollary, despite your wicked assertion, that lowering prices for residential consumers means prices increase for businesses. It simply means a fair price for all with a fair ROI that still enables ongoing investment. Not price gouging for excessive profits (that buyers of MRP will be hoping to gain the benefits of through high dividends)

Fairy tales, Richard. See my reply to Ken.

And as for MRP investors, they set the price according to the expected dividend stream in a free market. If they don't pay a fair price for it they will miss out to those who will. The Labour/redGreen sabotage has just reduced the stability of the market and therefore the price and return to the taxpayer. Many of those looking for a long-term investment will now have pulled out, as the Shareholders Society poll showed, so a lot of those still buying will be gamblers hoping either the saboteurs will never get to implement their plan or that they can escape with windfall capital profits before it impacts.

Get your crayons out. Lower price equals greater demand equals need for more power generation equals huge capital input (because nobody would make enough profit under the looney left proposal) equals either tax increases, price increases, power cuts ... or all of the above. Just think it through!

Ken, great to see a voice of sanity in between the comments of the inmates, you won't be popular but at least you are correct.

Gareth Hughes should have stuck to what he is qualified to do - pouring me beers at the Backbencher. Even his profile on the Green party website states he went to Vic Uni to study commerce but found it boring.....and now he thinks he has the smarts to manage the electricity market?

All Hey Clint showed was how comfortable the Greens have got around the msm. Gareth was among "friends", who never actually question his party's policies, so a joke question to Clint was just part of the usual banter. Gareth just pushed the envelope far enough that somebody had to react. And some msm outlets are simply not mentioning the faux pas (well they are on Gareth's support team) How surprising. Not .

Russel Norman is a dangerous, divisive, nasty piece of work. I would have expected nothing less than vindictive, wealth-envy driven, cynical undermining of NZ's productive asset values.

Maybe getting Russel Norman into parliament is payback for what Dingo Deans has done to their rugby? Perhaps we could ship all the Greens to Stewart Island, let them secede and they will leave the rest of us alone to get the country progressing again.

Agree ...career politicians are dangerous

The value of the powercos hasn't changed; they are still producing the same amount of power for the same price. The cost of the shares has dropped because potential buyers don't think they'll get big enough returns from their shares. Note "think" - this is all about perceived value, not real value. Or as we like to call it, hype - or bullsh*t.

I agree with the content of this article with one exception; the statement "It's the sort of attitude which means the value destruction seen this week can be just laughed off".
I'm not so sure it's a good idea to laugh-off the underlying implications of this sort of policy. The Labour /Greens policy has seen a mass fright put into markets, investors and potentially many companies across our nation - All of whom could well be adversely affected should a policy of this nature come to fruition. Should large companies withdraw from investment in New Zealand based upon this policy (and potentially others similar to it) becoming reality at the next election, many more jobs could be compromised. Given that most voters are lazy and could therefore opt to take any hand-out they can get without researching the implications, I'd say laughing it off is the last thing we want to be suggesting. Labour & the Greens receive a full mark for politics but they get a zero for finance & economy. And, given their smirking responses to the reaction from many business leaders, in my mind that's good reason to keep them out of a position of power.

When will Green/Labour announce they will adjust the ETS upwards to ensure they can deliver the cheaper electrcity ?

They don't need to . They've never made a secret of their ETS intentions. It will be expensive for consumers, but it won't offset their loss of revenue in any way. The govt. don't end up with it.

I meant to say " they will not increase ....". It is hypocritical of them to go on about high electricity prices when we know they intend to increase the ETS.

The issue quite rightly is that this muppet has no business or even life skills & as long as MMP exists we just encourage more people with a meaningless diploma to run our country's assets management & future economy. If this Labour Green lot were running this place 5 years ago we would be right behind the Greek economy. Hey Clint, are my shoe laces done up?

It's more than likely too late to build substantial middle-class wealth and a real sharemarket in NZ. Most of the middle class have already left.
The Key-English government's Mighty River privatisation model might have made a lot of sense if it had been applied in the Douglas-Palmer govt period and care made to sell the assets to business of substance - ie, to BHP, Bell Atlantic and Burlington Northern in the first place rather than Hawkins and Judge. The max share should have always been sold and distributed to NZ shareholders and citizens in the first place.
The rejection of Thatcher-Lawson type privatisations seems to have been that creating a real shareholder middle class that was likely to stay that way and live well, offended the Labour Govt and Roger Kerr, who said shares were not for ordinary Kiwis (The Roundtable /Treasury one).