Labour and Greens have been leaking their 2013 budget over the last 12 months.
Owl’s Observation
Affordable homes $3.5 billion
Andrew Little raid on ACC Fund to pay for Christchurch $3 billion
Greens printing money $3.5 billion
NZ power company raid on super profits $4 billion
Total: $14 billion. Read more »
A commenter objects to my characterisation of Nathan Guy
I must protest Whaleoil!
My main home is at Waikanae Beach on the Kapiti Coast and Nathan Guy is my MP, I have met him several times over the years and can attest he is a good and true man.Your claim he is a liar is very offensive to all of us who vote for Mr Guy.
Any sort of water project of this nature requires government involvement and is hardly socialism.
This commenter may have a point about Nathan being the kind of bovine intellect that appeals to voters in provincial New Zealand, but this doesn’t mitigate the fact he lied in his press release. Read more »
How embarrassing. Labour having to correct their own press release ‘correcting’ Phil O’Reilly.
CCN: Phil O’Reilley Open Letter Wrong On Many Counts
http://parliament.newsroom.co.nz/stories/ccn-phil-o-reilley- open-letter-wrong-on-many- counts
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Press Release by New Zealand Labour at 4:16PM, 02 May 2013
———————————————– Correction: at Labour’s request this replaces the earlier press release on this matter.
It will comes as no surprise that Labour disagrees with the open letter from Phil O’Reilly and others, says Labour’s Finance spokesperson David Parker.
“Labour is absolutely committed to lower power bills for New Zealand households and businesses. NZ Power will reduce bills by $230 – $330 a year for families and commercial bills by 5 – 7 per cent.
“The letter from Mr O’Reilly does not cure the current problems in the uncompetitive electricity market. Prices have increased since the independent report from Professor Wolack found $4.3 billion of overcharging. The system must be fixed.
After announcing their intention to intervene and gut the power market and destroy shareholder wealth Labour have been on the back foot facing claims that if their rationale is to be believed on power then why not intervene in other markets.
David Shearer of course is nowhere to be seen, he dropped this policy on Thursday afternoon, promptly made for the airport and bolted like a coward, leaving Grant Robertson and David Parker to unconvincingly defend the biggest lurch to the left since like forever.
Now they are saying they won’t intervene in any other market. They have been forced to because it is now apparent the damage their policy announcement is currently doing to the NZ economy. This is the start of an embarrassing backdown for Labour.
Labour Party deputy leader Grant Robertson has moved to try and reassure financial markets that its sudden lurch to favour central planning in the electricity industry is one-off.
In a statement attacking Economic Development Minister Steven Joyce, Mr Robertson says: “Labour makes no apology for stepping in to fix problems in the electricity sector. But this is not a signal that Labour is going to intervene elsewhere in the economy.
“As we said on the day we launched NZ Power, we have no plans to intervene in any other markets.”
That of course is a lie. Labour has plenty of plans for intervention. Read more »
Labour follows closely behind the UK in its policy making. In the UK they have the Fabian Society and a branch has been formed here in New Zealand for hard core Labour lefties.
Selwyn Pellett, Bernard Hickey and David Parker et al are all either members or contributors of the Fabians in New Zealand. One wonders if they will take the lead of the UK and implement a policy like that proposed over there…raising taxes off of the back of those filthy rich pensioners?
Pensioners’ taxes should increase, their benefits be cut, and a tax on property wealth should be introduced in order to share the pain of austerity with today’s hard-up workers, a think-tank said today.
The income gap between pensioners and workers has shrunk massively in the last few decades, so taxes should be raised on those in retirement, the Fabian Society said.
Middle-income working households enjoyed an income 93 per cent above that of middle-income retired households when Margaret Thatcher came to power in 1979, but that figure is now 37 per cent.
High-levels of home ownership among older people means the older generation are in effect far better off, as middle-income workers’ wages now stagnate and they cannot afford to buy a home. Read more »
Seamus Hogan of Offsetting Behaviour writes an open letter to David Shearer and David Parker. It is somewhat impertinent but asks valid questions which they need to answer:
Dear David and David,
I have read with interest the policy document you released yesterday: New Zealand Power, Energising New Zealand.I wonder if you could clarify a few points for me.
- In the document and the associated speeches, you quote the Wolak report’s figure of $4.3b of, in your words, “super profits”. Have either of your read the report, or any of the trenchant criticisms of that report? (A bit egotistically, I can suggest work that I was involved in, here, here, and here, but there are others.)
- You say that “prices are rising faster than in many of our major competitor countries”, and show a graph comparing the price trend in a number of countries since 1986. Let’s leave aside the question of what is meant by “competitor country”. Is it your position that prices were correct in New Zealand in 1986? Elsewhere you say that your new agency, New Zealand Power, will set prices based on operating costs and a fair return on capital. Is it your position that prices were generating a fair return on capital in 1986?
- You say that the faster rate of price growth in New Zealand “undermines the competitiveness of our economy”. But one of your graphs shows that real industrial prices have remained about constant since 1986 and commercial prices have fallen. What exactly do you mean by “competitiveness”? Read more »
David Parker was front and centre yesterday launching the Labour/Green economic assault on power generation.
“National is hurling all sorts of inaccurate insults at the NZ Power policy and muddying the waters. Their scaremongering shows they’re worried that hard-working New Zealanders who are sick of paying through the nose for electricity will embrace our new policy.
“Labour’s policy is quite clear. It will reduce power prices through two means.
“First, the single buyer NZ Power will buy electricity from generators on behalf of all New Zealanders at a fair price, based on their actual production costs and return on capital. It will not allow the companies the super profits from older hydro generation they get currently.
“Second, NZ Power will sell that wholesale power to retailers. As generators will be structurally separated from their retail business there will a level playing field and barriers to entry will be lowered. This will increase retail competition and lead to lower prices.
He was the go to man for comments yesterday, but I wonder of it is the same David Parker who, in a report to cabinet in 2006 said this:
“a single buyer would likely result in higher capital and operating costs”. He went on to say that: “The risks involved in changing arrangements could be significant. The resulting uncertainty could lead to investment proposals being put on hold. Direct implementation costs could be large.” And, he admitted that “The single buyer would be relatively poor at sustaining pressure on operational costs.” Read more »
Labour and the Greens get their beans from the Herald editorial writer:
Earlier this week, a Herald editorial suggested people thinking of buying Mighty River Power shares had little to fear from David Shearer’s statement that the Labour Party planned to shake up the electricity market when next in power. That, however, was before it was known how far back in time Labour planned to travel and how errant its policy would be. The details, released yesterday, have serious implications for the profitability of the state-owned power companies to be partly sold by the Government. A 3 per cent fall in Contact Energy’s share price soon after Mr Shearer’s announcement confirmed as much.
It really is a 1930s command economy solution not unlike Soviet Russia would employ. Worse it wiped $190 million off the value of power companies overnight, a nice little landmine from Labour and the Greens for Kiwisaver accounts.
Labour proposes to set up a single buyer, NZ Power, to purchase all electricity generation at what it deems a fair price, based on the actual cost of production. This, it says, will reduce the average household’s power bill by between $230 and $330 a year, a 10 per cent drop. Among its myriad functions, NZ Power would also be able to direct generators to use available capacity, and play a key planning role, including determining future investment needs for both generation and transmission. It would run a tender process for new generation, signing long-term contracts, so successful bidders received what was considered a fair return on their investment. Read more »
Labour and the Greens are committing economic sabotage in proposing Stalinist style state control of power prices.
It would be a disaster for private investors.. all those people with their savings in Contact and Trustpower shares (including Kiwisavers) would have their investment destroyed by their proposal.
Labour is promising to cut the average Kiwi power bill by up to $330 a year if elected to government.
It plans to do so by setting up a single buyer, NZ Power, to purchase all electricity generation at a fair price.
At a joint press conference Green co-leader Russel Norman outlined a similar policy, although the Greens would introduce an element of progressive pricing. Read more »
David Parker has to keep Labour’s spending expectations under control. Unfortunately for Labour there is stuff all money available for new spending, so they aren’t going to be able to fund their pet projects because there just isn’t the cash. After they take out bribes for the Greens and bribes for Winston there is going to be even less.
That’s why Parker has the shits with Len Brown.
Len wants lots of unfunded government money for him to piss away on his pet projects. The inner city rail loop is the big one, and a combination of Len and the Greens make it difficult for Parker not to commit money he doesn’t have on a dopey rail loop.
Parker needs to line Len up and tell him to stop bludging as there is no cash. Read more »
