10% power discounts
April 24th, 2012 at 1:00 pm by David FarrarWinston is a lot like Shane Jones – lots of natural talent, but allergic to actually doing the hard work. One example of this was when he fronted to the Electoral Commission’s review of MMP yesterday and rather then address any of the issues they are actually tasked with reviewing, talked about spending limits.
We see this lack of attention to detail, or well basic facts, in the request for a 10 per cent winter power discount for Super Gold Card holders to be included in next month’s Budget. Peters said:
New Zealand First is asking the Government to include a 10 per cent winter power discount scheme for SuperGold Card holders in the Budget next month.
Now this is a legitimate request. Personally I disagree with it, as assistance should go on the basis of need, not on the basis of age. Why should Winston himself get a 10% power discount, but not a poor struggling family? But lets even put aside the desirability of the policy, and look at the facts.
Rt Hon Winston Peters says a discount on winter electricity prices for SuperGold Card holders is the responsible thing to do in times of sharply increasing prices.
Actually he CPI records electricity costs have increased only 2.0% in the last year. Over the last three years the increase was 10%, of which 2.2% was the GST increase (which was compensated for), so an underlying increase of 7.8% over three years.
During the last term of Labour (when Peters was a Minister), electricity costs went up 22.9%. The previous three years it went up 23.8%. So the annual increase has fallen from almost 8% to just 2%. But let’s ignore both the policy flaws and the false rhetoric.
Under the New Zealand First scheme, the cheaper electricity would be supplied by the three State Owned Enterprise-power generators – Mighty River Power, Meridian and Genesis.
Okay here is the real flaw, which shows that this is just a press release masquerading as a policy. First of all, it can’t possibly provide a rebate to all SGC holders, when only some of the generators are included. Contact Energy is the second largest generator, providing 24% of the market.
The other flaw is that generators do not know whom the end customers are unless they are also retailers. You can not ask generators to provide a discount for retail customers. It’s like asking Fonterra to supply cheaper milk to pensioners.
Mr Peters says these power companies and the Commerce Commission act as a “price-fixing cartel” which sees domestic users pay more than their fair share.
“Domestic users are paying more for power than both commercial and industrial electricity users. This imbalance will only get worse if the government proceeds with its plan to sell off the power stations to foreign companies.
This is false. My apartment and business are with the same company. As a domestic user I pay 27.35c per unit (includes line charges), and my commercial business pays $33.43c per unit.
It would potentially benefit more than 590,000 SuperGold Card holders by about $100 on their cold weather bills.
“It would cost the highly profitable state-owned power companies about $34 million a year but these companies would benefit from a larger customer base.
So in fact Peters is proposing trying to wipe out Contact Energy by having the taxpayer subsidise the SOEs.
“The power companies can easily afford it and the changes can be enacted swiftly under existing legislation, or the Government can use new legislation already prepared by New Zealand First.”
Given Peters appalling attention to detail, I’d hate to think what their legislation would look like.
The issue of electricity affordability for those on fixed incomes, in winter, is a valid one. The proposed solution, is a typical PR stunt.
Incidentally the Government has said they won’t be legislating for a 10% discount, noting that the value of the pension for a married couple has increased $194 per fortnight since the 2008 election.
Tags: electricity prices, Winston First
April 24th, 2012 at 1:08 pm
I don’t get how power prices increased just 2% last year?
Which company? My price increases by 4-6% per year without fail.
[DPF: The 2% is from the CPI, so it is averaged over all companies. Note that it is total cost, not per unit cost. So if people are using less power, then that is a factor]
Vote:April 24th, 2012 at 1:11 pm
Yeah but who cares, DPF. Since when has the media ever been concerned about what the facts are? That’s why Winston is doing it – to get the meme out there. The actual reality of it doesn’t matter, it never did. It’s the meme which matters and that’s the only thing.
Of course if we had a media who had the first fucking clue then politicians and activists like the gay activists over this bar thing, wouldn’t even get past first base. But we don’t, so they do, all the time.
So given this is the obvious reality apparent to anyone with a 3 digit IQ, what’s the point of pretending it’s about facts?
Vote:April 24th, 2012 at 1:22 pm
Why the fuck should the ‘needy’ get a 10% discount when others don’t? I suppose next you’ll be advocating that poor people should get a 10% discount on their groceries at the supermarket while richer people pay the full price.
[DPF: No, read what I said. I said assistance should be on the basis of need, not a discount. As it happens, I think it is bad policy to subsidise certain goods or services. Our welfare system should give people enough money to cover the essentials]
Vote:April 24th, 2012 at 1:39 pm
I don’t think the power bill at Saint Marys Bay is in Winston’s name, anyway.
Vote:April 24th, 2012 at 1:40 pm
David, that’s a seriously good post.
Vote:April 24th, 2012 at 1:43 pm
$100. Who cares? I am surprised he could be bothered working up the energy to make the press release.
Vote:April 24th, 2012 at 1:54 pm
My understanding is that $100 is a significant amount for people that are living solely on their NZ Super.
But I strongly dislike this type of policy. The prices for everyone else will have to rise to cover the deficit.
Vote:April 24th, 2012 at 2:07 pm
That’ll be tomorrow’s press release. Stop giving him ideas.
Vote:April 24th, 2012 at 2:18 pm
Poor Winston is going senile. He has confused the Electoral Commission with the Electricity Commission. Surely that is more significant that his incohrrent policy pandering…
Vote:April 24th, 2012 at 2:45 pm
Surely it’d be significantly easier and cheaper to just increase the pension by $2 per week, and it’d probably have a great effect for those that really are in need of the assistance (e.g. living in a tiny unit, minimizing their use of heating etc).
I guess at least he’s not suggesting it be GST free for over-65s…
Vote:April 24th, 2012 at 3:11 pm
s.russel has nailed it. Was Winson whiskey’ed? Did the panel let him ramble while laughing quietly to themselves? If it is the onset of senility, at least he’ll have more in common with his average supporter.
Vote:April 24th, 2012 at 3:33 pm
“I don’t think the power bill at Saint Marys Bay is in Winston’s name, anyway.”
Bwahahaaaaaaaaaaaa
Now to clean up the spilt coffee….
Vote: