Labour and Greens want Stalinist price controls on power

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. 

Norman said each household would receive a 300 kilowatt-hours block on which they paid only lines and normal retail costs.

After that they would pay higher prices for additional power used.

The Greens did not supply estimates of how long 300 kWh of electricity would last the average household.

“That will save each family $300 a year while encouraging efficient use of power at the margins.”

Announcing the plans Labour leader David Shearer and Norman said they had been working independently on their policies and realised they were heading in a very similar direction.

While there were differences ”at the margin” such as over progressive pricing they believed they could negotiate a compromise.

Labour’s finance spokesman David Parker said Labour was open to discussing progressive pricing, but there were issues of equity such as between different regions with different climates.

Shearer said the plan would bring down prices and create 5000 jobs in the wider economy.

It would cut the nation’s power bills by up to $700m a year.

This announcement is even more crazy than if they announced massive investment in solar energy. Instead they are effectively crippling our power generation capacity through economic stupidity.

No one would invest in new generation – why would they, there is no incentive, through profit to embark ont eh very expensive process of building power generation.

Price setting didn’t work for Muldoon in the 80’s nor did it work for Soviet Russia

Quite how having the state fix power prices will create jobs is beyond me. Where will the 5000 jobs supposedly come from? Or is that how many people Labour and the Greens hope to employ in the new State Power Control organisation?

What happened to their bleating about the dividends lost to the state though asset sales? – now they’re totally forgoing them undermining their entire argument

State control seldom succeeds…actually it never succeeds.

This is once again a desperate attempt and shabby attempt to undermine Mighty River Power float and upset the 400,000+ NZers who expressed an interest.

Is this an attempt to get cheap power for all the money printing presses they’d be running.

Oh and then of course there’s the costs to households of a supercharged ETS, banning fracking, banning oil and gas exploration, banning new hydro dams…and what ever else the Green taliban demands we do to prevent progress.

One thing is certain now though. Labour has ceded economic policy ideas to the Greens and out-sourced it all to the relics of communism.

 


THANK YOU for being a subscriber. Because of you Whaleoil is going from strength to strength. It is a little known fact that Whaleoil subscribers are better in bed, good looking and highly intelligent. Sometimes all at once! Please Click Here Now to subscribe to an ad-free Whaleoil.

  • Lofty

    Fuck em…….wankers……..I have just this minute completed our application for a substantial amount of MRP shares.
    They are dirty little saboteurs, and as all bullies should be treated, we will not be scared off from our right to own shares based on filthy veiled threats.

    • Steve (North Shore)

      You just beat me to it Lofty

    • Lofty

      I have just completed our family trust application for another 10k of shares….fuck em…..hear this norman and your wee puppy shearer…me and my family plus our board of directors will not nor ever be cowed by your bullying and economic sabotage.
      This is the defining and turning point for labour….it will fuck them and good job.

      • Gazzaw

        This is a deliberate & calculated move designed to devalue the state’s assets by billions of dollars. It is nothing less than a treasonable initiative and could result in the final demise of the labour party. Who is in the driver’s seat? CTU House or Russel Norman?

        • GregM

          That’s what is really pissing me off. I busted my arse for years, I now have a good parcel of CEN shares, and two fuckwits who aren’t even in government have just cost me several hundred dollars in a few hours.
          If I want to do irresponsible shit with my money that’s my choice, where did I say the unions and green taliban can decide what to do with it.
          Snap election now, enough of this shit already.

          • Sir Cullen’s Sidekick

            Bro – you will be losing much more when Sheep’s rich prick tax bites you in your hard working arse from 2014….what will you do? Snap election? Naked Emperor will be wiped out based on the latest Rouge Morgan poll.

    • Gigi

      Do the maths there is no ‘substantial’ allocation so send a huge cheque and get a huge cheque back….but nice try. Good offer stacks up well but you won’t get enough shares unless you have enoug IRD numbers

  • I know where the 5000 jobs will come from – it seems Muldoon’s Think Big only created 405,000 new jobs haha! (these are the remaining ones)

  • Drhill

    So not only is there working for families with free money, there’s now free power?

    • Polish Pride

      Or perhaps power is actually overpriced. Given that we have a high percentage of hydro vs other countries, all or hydro is automated and we have the second highest poer prices per kilowatt hour in the OECD. It probably is way over priced

      • Goldie

        Because in most countries power is from coal which is dirt cheap.
        Hydro-power is not “automated”.

        • Polish Pride

          Ha ha Hydro power IS automated and has been since the late 80s at many Hydro Dams. I grew up in an area with hydro and watched it happen.

          • Gigi

            Rain is automated?

  • coventry

    for less than $1 a day, we shall try & buy your vote

  • coventry

    we shall forgo the dividend, but shall tax you more to make up for it

  • Lofty

    At least we know now which end is the tail and which is the dog.
    How does it feel labour knowing that the once proud party has submitted to the position of watermelon lapdog?
    You do everything in your power to ensure that disaffected voters will remain just that..

  • rockape

    So not only wont we have investments. NZ wont be getting dividends on the 51% it owns. Then take into account the losses not only to investors but those with Kiwisaver and of course the Cullen Fund. So this is a policy good for NZ. Only a couple of weeks ago both Labour and the Greens were bemoaning the fact that selling 49% was a huge loss of dividend to NZ all the time they were planning to saboutage that dividend anyway. Not thought through; not going to work!

    • Polish Pride

      Perhaps they are realising that policies shouldn’t JUST be about economics but about the wellbeing and happiness of ALL New Zealanders. Even you get to benefit from this in theory. Your power bills will be lower..

      • Goldie

        Well, your power bills may be lower, but you won’t be able to read them in the dark.

        • Polish Pride

          Ha – where I live we get about four power cuts a year so the current system aint working to well. When I was growing up loooong before deregulation we very rarely had them.

          • dianne65

            Well with the Labour/Green policy you will be in total darkness most of the year. Enjoy.

      • rockape

        Well pp The living proof that too much dope effects the mind adversly. Labour and Greens both have policies to INCREASE the cost of power, now they want to reduce it they say.!!!! Something wrong with that picture. Not only that they are forgoing the dividents to Government that Las tweek were VITAL to NZs economy, the reason they opposed asset sales. Lastly , they are not selling power to the consumer, the power retailers still will be and their profits wont be controlled by Labour! We will be in for power for 3 days a week and candles for the rest. Where are Labour going to find the money they will loose in dividents, yes they will up taxes. This is a last minute policy cobbled together by idiots when they failed to stop the sale of MRP and not thought through. Its going to fail and badly. Whaqt is the insentive for power companies to invest in developing better power systems when their profits are slashed.

        • Polish Pride

          legalising and taxing Cannabis

          • rockape

            I can see why you want this policy, you need the power bill down it will make dope so much cheaper!

  • Phar Lap

    The commie greens have a plan for an inheritance tax atarting at 15% and it will be inflation adjusted ,.Should be plenty of money there for many, many bribes to come.To think that an unelected pack of green party communists most of them imports could have so much future unbridled power.Would be great for John Key to call a snap election,and stop the green taleban ,and Shonky Shearers corrupt mafia Lie-bour Party,from gaining any form of psychological advantages to the easily fooled NZ voter.

    • Phar Lap

      Just heard the Lie-bour Party channel TVNZ promoting their SICK O’CLOCK news that Corin Dann was at a meeting with Labour and” greens” to bring down our power charges.Wonder what LIE-bour sycophant got that blurb out.

  • What the fuck is wrong with those Greenie idiots? Quite a lot, by the look of it.

  • Auto_Immune

    It reeks of fringe policy that even a Clark/Cullen led Labour Party would of never considered.

    Vindictive policy just to scare off potential investors in MRP.

  • tarkwin

    I was right about these guys using Animal Farm as their policy.

  • There is a point there. Actual production of Hydro or geothermal power costs bugger all, so why is it so expensive to buy? Companies both large and small as well as their shareholders, directors and workers would benefit by bringing the cost down. Power companies may then not look like a get-rich-quick scheme, but when all else turns to custard, would look like one of the surest bets around. If you want big dividends, put your cash into riskier ventures!

    • kohibruce

      The single buyer model they’re talking about could be an effective alternative to the current doctrinaire market system that has its pluses, but suffers from insufficient players (the 3 major generators) to be truly competitive. However, if the single-buyer model is used as a tool for socialization of power supply then efforts to make waka NZ go faster will be counterproductive and we are better off with the status quo.. .

      • The other Neil

        you cant count. there are five major generators, Contact, Meridian, Mighty River Power, Genesis and TrustPower. Plus a raft of other generators, Eastland Energy, NSK, Tuaropaki Power company, Tauhara Nth Trust etc etc.

        • kohibruce

          Thanks for information – more reason for NZ to stick with what it has, rather than endure disruptive change and political interference in pricing.

          • The other Neil

            No problem. They are offering a solution to a problem that does not exist. Ditch the ets and the prices will fall. Get everyone a job and they can afford energy. Grow the economy, grow incomes and we can all afford energy. Drop petrol taxes a bit, no distortion to the market and everyone would be better off except for the govt!

    • The other Neil

      It costs a lot to build. About NZ$400m for 100MW of geothermal. The cash operating costs are relatively low, but you have to earn the upfront capital back over 30 years. The simple payback period would be about 15 years minimum. No one invests to earn operating costs! The effective after tax rate of return would be about 10%.

      The single buyer model was considered and rejected at various times over the last 20 years. Groundhog day.

      • Polish Pride

        well no not ground hog because this time it’s been considered and NOT rejected. This time its been picked up.

  • JC

    Its a nuclear option on several levels..

    1. They could be just trying to kill the power sales and if successful will pull back from this madness and go for something more reasonable.. I doubt they are that clever.

    2. A Labour led Govt buys all the power, gives deep discounts to Winstons wrinklies and Hone’s mates and jacks up the price 40% to the middle class and wealthy.. that way there will be an “average” price saving of $300 per household. Over time middle class and wealthy discover this is a stealth tax on income over about $40,000.

    3. Govt buys the power cheap and cranks up the price to business. People who run a business from home get two power bills and 5000 inspectors police the split between personal and work.

    4. A hollow ghostly cackle comes from Muldoon’s grave.

    JC

    • hazardsareonitsok

      I laughed at 4

    • Sir Cullen’s Sidekick

      Sheep’s policy is a vote winner Mr JC. Master stroke! Brilliant

  • blokeintakapuna

    They’ve nailed their colours to the mast pole now for all to see… And for all to ridicule.

    Whilst populist rhetoric might go down well at union meetings and Labours AGM’s, not only will this add a new layer of red tape bureaurocracy to the true cost, there’s no mention of true Opex or R&M costs… Only promises with no details.

    It’s all a moot point anyway… First they got to get their greasy, corrupt fingers on the levers of power by winning an election.

    • rockape

      Much as I hate to say it its going to be too close to call unless National lifts its game enough to govern alone.

      • blokeintakapuna

        I think you’re probably right, but hope for NZ sake you aren’t… But if you are… Do you need a deck hand on this yacht of yours? I can give free fishing lessons… And often do…

  • rockape

    This is the Green Labour alliance in opposition. We can look forward to them in power in 18 months. Sad for NZ, i am glad all my money is easily realised and that i have a nice yacht, will probably go on a World cruise and see you guys in a few tears when the dollar is worth bugger all and the property market crashed. I will still vote National, but a postal vote!

    • Pokerface

      Are you looking for crew?

      • rockape

        Yes just think,6 months and one day out of the country and you can say by to the taxman!

  • Colin Cloudesley

    Come boys and girls, look at these two crawling up each others bottom, just shows you that these two have been waiting for the Gay Marriage Bill to pass so they can marry each other. But that Bitch Norman I think will milk the old Shearer and fuck off once he gets what he wants and play the field, never know, Winston may even want to join in.
    SHEARER SHOW US THE MONEY.

  • GregM

    Complete utter slimeball attempt to undermine the MRP float.

    All the power generation companies would have to do if this ever comes to pass is tell the new state monopoly ” this is what we will charge for the power, and you are not getting it any cheaper”. Then the whole hare brained thing falls over.

    The most idiotic and ill thought out piece of crap I’ve heard yet, they really have outdone themselves on this oneu

    • Polish Pride

      Then they legislate to fix that problem for themselves too.

  • CJA

    Okay so they have a new policy but I’m unsure as to whether this has been thoroughly thought through. Reason I say this is okay I generally have voted National in the past and will probably vote that way in the future but if I was a swing voter who earnt reasonable money would this new policy sway me to vote Labour or the Greens? Probably not if I’m perfectly honest. It is directed at their voters already, in my opinion, which is what confuses me as I don’t think it is a vote winner. I’m not saying that the struggling wouldn’t want another $300 in their pockets from power savings but again that $300 would have minimal impact on the middle classes where the swing vote is. Also another point to make is the power industry is extremely complex and adding more complexity to it is not going to help matters. It’s kind of like adding new tax laws for the sake of it.

  • This is not Stalinist, but rather corporatist. Shades of “Il manifesto dei fasci italiani di combattimento” indeed

    • NotForTurning

      No it’s Marxist plain and simple:

      To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.

  • In Vino Veritas

    Back to the old days of NZED and ECNZ and power black outs. Lovely. But then people, this is exactly what the Greens want. Take NZ back to the dark ages. Candles, horse and carts, self sufficiency for food. Funny that though, only the fittest would survive. The exact opposite to what they preach at the moment.

  • coventry

    If the great unwashed would like to bring down the price of power, how about not cock blocking the expansion/development plans of the power co’s. Anyone remember Project Aqua ?

    • NotForTurning

      How about not using power they can’t pay for?

      Problem solved.

  • rockape

    This sounds like the Greens are not telling the whole story. Are they giving up plans for the increase in carbon tax, nothing surer to put up power prices. They must know that Green Power ie wind generation requires big outlays who the hell is going to invest in that. Cheap generation schemes will come to the front and they are not very green. What arn’t the Greens telling us.

  • Phar Lap

    Wonder will people who are saving for their retirement with Kiwi Saver.As at this very moment one of the big power companies has taken a financial hit.That company has many LIE-bour Party supporters k.iwi saver funds invested there.Shonky Shearer and commie Norman might have to rethink their Kiwi Saver sabotage.

  • sheppy

    Curious that they don’t say what how long a block is where you get to buy your 300 units at the discounted price. If a block is 12 months and you only get 300 units before the price rises then I’d expect power is going up as is the cost of candles and gas fires. 300 units isn’t much power when a 3 kw fire takes 3 units per hour, and that’s before you dare to turn on a light, boil the kettle or use an electric cooker or heaven forbid use the immersion heater.

    Yet more stealthy crap from the losers!

  • GregM

    This bullshit policy statement is already costing investors money.

    https://www.nzx.com/companies/CEN
    Economic sabotage, and they want to be the government??

    • Polish Pride

      would you have preferred they’d not said anything about the policy until the election perhaps…?

      • GregM

        And until the election when the left will hopefully lose again, investors lose THEIR money. I’m down $500 in one afternoon, because of an absolute bullshit policy statement.

        • Polish Pride

          Such is the nature of investment

          • NotForTurning

            Such is the nature of investment under communism

          • Polish Pride

            We aren’t living under communism.
            Perhaps they are moving us to a resource based economy.

          • NotForTurning

            Debatable. But after the next election – who knows?

          • Pissedoffyouth

            Uh, what? You can lose $500 under capitalism too

      • NotForTurning

        That’s simple commonsense. The problem is do-nothing, smile-and-wave Key not doing anything after the damn election

  • Jman

    Hugo Chavez would be impressed

    • Mostly_Harmless

      Greens would take that as a compliment.

  • Gazzaw

    Go to the country JK! Finish off this coalition from hell once and for all. They can’t be allowed to get away with this economic blackmail.

  • NotForTurning

    To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.

    Communism. Pure and simple. And you know what’s the worst bit of this: remember what happened to prices under Hellen? They went up every single year so that Labour could rake of even bigger dividends to fund their union mates’ salaries.

    Well Labour’s communist power-purchasing company will have to do the damn same thing.

  • island time

    Yesterday I criticised them for not sharing any policy. At least they have shown their hand completely this time. their timing is deliberate of course.

  • Goldie

    Economics 101: Faced with lower prices, electricity suppliers will simply turn off their generators to the point where their marginal rate of return matches the set price. As a result, there will be power shortages.

    The question is how will the power shortages be handled. If the Government doesn’t introduce some sort of compulsory rationing, then the result will be random blackouts and chaos.

    Of course, the huge irony of this is that alternative “green” energy is only viable for investment if the electricity price is high – if the government forces the price to be low, then coal power is what remains viable. Well done to the Greens – they have just killed off green energy investment. The sheer staggering idiocy of the Greens beggars belief.

    • rockape

      Got it in one Goldie, I would put my money on the smart people in business out thinking the dumbos in the Labour AND Green party anyday!

  • steve and monique

    Just a bunch of poor losers,and idiots. .

  • Steve (North Shore)

    If these cork soakers can save you up to $330 per year, they will then tax you $330 per year.
    It is just a revenge thing, trying to make the arse fall out of the SOE share sale.
    Fuck off you communists

  • RockyFist

    Just had a look at the power bill and we use around 24 kW per day. Therefore 300 kW is only equivalent to approximately 12 days worth of power. I can save that by going fishing six weekends of the year.

  • rockape

    Well old dumbarse shearer has done it again, a policy to appeal to a few already Labour supporters, and pissed off the rest. If you have money in shares, directly, or in Kiwisaver, Labour has just screwed you and they are not even in Government yet! What idiot is advising Labour.

  • rockape

    Why dont National play the same game? If the end justifies the means and we want another 3 years of National, lets not piss about. How about a nice fat bribe National The 2 Billion you get from sale of assets could be $1000 for every household in NZ but only if National is in Government, I dont care if you give it away as free KFC just play these wankers at their own game.You screwed up just once, and that was not opposing MMP you may end up paying a heavy price and so will every KIWI for that mistake.

    • emmess74

      No, what National needs to is to scrap the ETS and drastically reform the RMA and watch the power prices plummet and let the commie bastards bitch and moan about how the evil capitalists are not ‘saving the planet’. And god forbid if they ever reinstate the environmental regulations along with this idiotic policy not only will it be a total failure, it will fail miserably even in its stated aim.

  • Changeiscoming

    Something like this had to happen…With liberal National (lib nats as I will call them from now on) having moved from Centre Right to Centre Left, to occupy the spot Labour use to hold. Labour had to stand out and differentiate itself so have moved from centre Left to pure Left. Over where the Greens are and you will find they and the greens are now competing for the same vote.
    Hence they got together and came up with a communist policy.

  • Sir Cullen’s Sidekick

    Sheep and Commie have successfully thwarted MRP share offer. True patriots….

  • Sir Cullen’s Sidekick

    I am also recommending to Sheep that he appoints a Electricity Commissioner who will have a huge office funded by tax payer

31%