Labour on electricity assets

July 24th, 2012 at 7:00 am by David Farrar

writes:

Speaking to a group of corporate head-hunters on July 11, Mr Parker spelled out the details of ’s policy on . Concerned to prevent “infrastructure assets with monopoly characteristics” from being sold to offshore buyers, , in the run-up to last year’s election, drew up a “closed list” – to keep a “bright line” between “what is to be sold and what is not”. Among the infrastructure that was not to be sold were any electricity line, water storage or irrigation networks; seaports or airports; and public hospitals, schools, railway lines or roads.

Not included in Labour’s “closed list” were telecommunications networks and – amazingly – “electricity generators”.

According to Labour’s policy: “While the electricity market is on the cusp of becoming uncompetitive and exhibits monopoly-like characteristics, generation assets are diverse in nature, location and ownership.”

What this means is that although Labour went into the last general election on a policy of “no ”; and in spite of the fact that its campaign advertising showed a vast banner displaying that very message being draped over a hydro-electricity generating dam, the party was unwilling to include electricity generators on the list of state-owned infrastructure that “ought to be run in the New Zealand interest” – and never be sold to foreigners.

Am I alone in thinking that Labour’s foreign investment policy fatally compromises its current campaign against asset sales? If the generation of electricity is an activity which properly belongs to the market, and if New Zealand’s electricity generation assets are “diverse in nature, location and ownership” and, therefore, able to be purchased by foreign interests, then I’m at a loss to know why the Labour Party is opposed to their partial privatisation.

In one sense you can argue that there is no contradiction. The foreign investment policy deals with assets owned by the private sector while the privatisation policy is about assets owned by the Government.

However considering the hysteria from Labour over minority share-holdings in some SOE energy companies, it is interesting to contrast that with their policy that it would be fine for (for example) a foreign company to buy all of Contact Energy or Todd Energy.

Also useful to contrast to their record in office. They claim they are now against any foreign investment in electricity lines companies, yet they approved the sale of the Wellington lines company.

At the end of the day, you have to wonder if Labour actually stands for anything, apart from wanting to be in power.

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15 Responses to “Labour on electricity assets”

  1. Lee C (4,516 comments) says:

    with respect that should have read

    “…you have to wonder if Labour actually stands for anything, apart from wanting to be in power . . . so it can continue to sell stuff off . .”

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  2. Pete George (23,559 comments) says:

    It’s not just that Labour, obviously, want to be in power – they are making some very dumb arguments to try and undermine Government policies.

    All their wolf wailing flailing misses and masks some obvious flaws in the share float plans, particularly the lack of diversity in what’s being offered. If National want to encourage and teach new investors they should make one of the most important rules of investment clear – spread your risk.

    Energy companies are generally regarded as sound investments but four energy companies are not diverse. And the airline business is seen as much higher risk.

    I’ll probably buy a few shares (if the price is right) but am wary of the real asset sale flaws.

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  3. mikenmild (11,247 comments) says:

    ‘you have to wonder if Labour actually stands for anything, apart from wanting to be in power’
    As distinct from National?

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  4. burt (8,269 comments) says:

    mikenmild

    That’s right – your beloved party is only as bad as a party you detest.

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  5. burt (8,269 comments) says:

    One day Trotter will come to realise that unions (like any other self serving parasite organisation) are a key problem in politics. Till then he’s part of the problem – ignore him.

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  6. mikenmild (11,247 comments) says:

    burt
    I refuse to buy into the illusions presented by political parties. Unlike our host, I can see that there is no difference in their approach or actions.

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  7. krazykiwi (9,186 comments) says:

    mikenmild 7:49 – You beat me to it. The idea that polititians are there to nobily serve anyone interests other than their own is long dead.

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  8. expat (4,050 comments) says:

    What does Labour stand for?

    Blue knit vests for all!

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  9. hmmokrightitis (1,590 comments) says:

    Actually miken, I disagree. labour over 9 years showed us their wonderful ability to govern without mandate – you will be aware of numerous examples, as we all are, think airforce, courts, freedom of speech – and national have sought and delivered to a mandate.

    You may not agree with what they stand for, but at the very least, National stand for something in public, are willing to take their mandate to the country to be voted on. Big difference.

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  10. mikenmild (11,247 comments) says:

    hmmo
    No, I disagree with that. If anyhting, the distinction between the parties tends to be the respective willingnerss to effect change, whether rightly or wrongly. Labour governments have tended to introduce reforms. National governments have tended to go with the status quo that they have inherited, inlcuding swalowing whatever reforms they have previously fulminated against.

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  11. YesWeDid (1,048 comments) says:

    ‘At the end of the day, you have to wonder if Labour actually stands for anything, apart from wanting to be in power.’

    Exactly the same argument applies to National, they won’t change the student loan scheme, or WFF or increase the pension age because it will cost them votes. What does National stand for?

    National tinker around the edges with a fair amount of diversion politics thrown in.

    Politics is tribal, people support their party based on who they are, not what they do and DPF is a cheer leader for the National tribe.

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  12. david (2,557 comments) says:

    Well done YWD (9:07am), you have actually put your finger precisely on one of the major differences between National and Labour/Greens.

    That is: a level of certainty and the willingness to stand absolutely behind their statements of intentions.

    Far from being “not standing for anything” the policies on Student Loans, WFF and Pension Age are there, public and National can be trusted to deliver on them, as long as John Key is leading them and until they publicly state an intention to depart from them. Even then I think you will find that they will put their plans before the electorate and go to a General Election on those plans.
    As an aside, if anyone has bothered to listen, there has been a lot of thinking behind the pension age issue and the policy is supported by some pretty good research which shows that the media, many commentators, the Pol Sci fraternity and the Opposition parties who are all shouting hysterically about the tidal wave of boomers that will bankrupt the economy, just haven’t thought it through. It is much like Climate change, all the doomsayers are quoting each other and assuming that the other guys have done their homework but really it is not the bogey that the first person who shouted “Fire” thought.

    Back to the difference between Nats and Labour/Greens. Compare and contrast the certainty that the National policy settings have created for t6he economy with the history of the others. The Greens should be dismissed because whatever they say will be unworkable and economic suicide.
    Labour has a proven track record of U-turns and secret agendas which suddenly become apparent when action is taken. Some examples given above are the Privy Council, introduction of interest-free student loans in the run-up to an election, purchase of Kiwirail to empty the coffers, scrapping the strike-wing etc etc.

    Labour just do not where they stand on issues and cannot hold a constant policy for 5 minutes in opposition let alone through an election and into Government. GST on fruit and veg, reversing GST increase, which state investments can be sold and which ones retained (Parker’s speech specifically did not include power generation as a strategic asset), Auckland Airport is Strategic but Wellington’s power reticulation is not. They are just all over the place.

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  13. simonway (387 comments) says:

    you have to wonder if Labour actually stands for anything, apart from wanting to be in power.

    God forbid a party ever change its policy. I could dig up half a dozen former Nat policies that the party’s since renounced in ten minutes.

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  14. UpandComer (536 comments) says:

    @ simonway

    No it’s different. Labour have been ‘passionately’ agonising, aggrandizing and all the rest of it on how evil the asset sales are for months and months and months. Hours of question time. Hours of general debate. A huge election campaign that was the sole foundation of their campaign, and then support for a taxpayer funded ‘referendum’. The fact they won’t even buy them back and exclude these same exact sales from sell offs is the absolute paragon of hypocrisy and quite hilarious in my opinion. How can you trust these intellectually dishonest hypocrites.

    Then there is the fact that Labour hold themselves out as being the ‘pure’ morally superior party in general over the evil right wing conspiring Tories, most of whom have the temerity to be people successful outside of politics and academia who have actually made some friggen money.

    This is totally different from a backdown on serious education reform for instance. Totally different, and most Labour people actually know it and don’t like it very much.

    @ milkenmild

    kiwisaver was a good labour reform, kiwibank too, although I’ll give the latter grudgingly to Anderton.

    Aside from that, name a handful of structural intrinsic reforms by the Labour party in their 9 years that was effective and wasn’t about handing out hundreds of dollars to voters they needed.

    @ krazykiwi

    Hey kiwi, would you be a politician with all the attendant crap for the average wage. ‘soak the buggers I say, what about the workers!’

    @ Yeswedid

    You obviously have no knowledge of the hundreds of millions of dollars and massive changes being made in welfare and justice, or any perspective over what National has accomplished with really careful planning.

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  15. mikenmild (11,247 comments) says:

    UpandComer
    I wasn’t making that comment to defend anything in particular. I was just advancing a general rule of thumb that Labour governments do things; National governments don’t.

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