Proposed sale of energy assets “treacherous”

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.