Labour and Greens propose a state monopoly for power purchasing

April 18th, 2013 at 12:24 pm by David Farrar

Kate Chapman reports:

is promising to cut the average Kiwi power bill by up to $330 a year if elected to government next year.

It plans to do so by setting up a single buyer, NZ Power, to purchase all electricity generation at a fair price.

Announcing the plan today, leader David Shearer said it would create 5000 jobs.

The Crown would forgo dividends and tax revenue from the power companies at a cost of $60-$90 million a year.

“I’m not prepared to sit back while power companies cream super-profits at the expense of households and the economy,” Shearer said.

As a single wholesale buyer NZ Power will set electricity prices ensuring power companies get a fair prices but not super profits.

The sums here look as dodgy as with Kiwibuild. A cost of $90 million a year is meant to translate into $330 for 2 million households? That’s a 500% difference.

Secondly the history of NZ is that state monopolies do the worse for consumers and prices.

I await the policy to make it illegal to sell houses, except through the state. I mean houses are just as essential as electricity.

What this effectively means is that politicians will set the price of electricity. Remember when Muldoon decided what the interest rates will be? And the Government decided what rents you could charge, and price and wage freeze? All decided by politicians.

A monopoly crown buyer of all electricity will get to unilaterally set the price of electricity and MPs will decide who sits on it and effectively tell them what price they want electricity to be at.

UPDATE: Readers should be aware that this policy is a de facto nationalisation of the privately owned Todd Energy and Contact Energy. it is almost a confiscation without compensation of their assets. Because Labour and are saying we will pass a law to make it illegal for you to sell power to anyone except the Government, and only at the price we unilaterally set.

Think about that, and the precedent it is setting.

This is a policy out of the 1970s and some sort of socialist nirvana state.

Imagine you set up a business, and one day the Government came along and said we are going to make it illegal for you to sell your product or service any more – to anyone but us. And you get no say in what the price will be – we will unilaterally determine that.

This is akin to theft from the shareholders (and if you are in KiwiSaver you are probably an indirect shareholder) of Todd Energy and Contact Energy.

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137 Responses to “Labour and Greens propose a state monopoly for power purchasing”

  1. toms (301 comments) says:

    Hidden due to low comment rating. Click here to see.

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  2. toad (3,654 comments) says:

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  3. labrator (1,691 comments) says:

    Looks good to me.

    That’s like the ultimate endorsement of this as an idiotic idea. Tell me toms, are you so smart you should make everyone elses decisions for them, or so stupid you need all of your decisions made for you?

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  4. insider (990 comments) says:

    Where are these 5000 jobs going to come from? Is that the size of he bureaucracy they are creating?

    @ toms weird how this country of four million can have markets for things like gas, petrol, food, land, but somehow can’t manage it for power. We must be really really stupid

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  5. toms (301 comments) says:

    Hidden due to low comment rating. Click here to see.

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  6. JC (838 comments) says:

    Insider, he’ll need at least that many people because the obvious carry on is that the Govt will not only set the price but how much people will be allowed to use.

    JC

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  7. RRM (8,988 comments) says:

    We are at war with Eurasia.

    And East Asia.

    :roll:

    What. The. Fuck???

    I’m going to have to form a sensible left party myself for the next election, this Labour lot just go from bad to worse…

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  8. nasska (9,501 comments) says:

    If Labour/Greens get away with this wankfest it will have taken just over forty years to return us to the status of a 1970′s Polish shipyard.

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  9. RRM (8,988 comments) says:

    Toad – I don’t think Pharmac just tells the drug companies what the “fair price” for their products is going to be… ;-)

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  10. odysseus (22 comments) says:

    Hidden due to low comment rating. Click here to see.

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  11. In Vino Veritas (136 comments) says:

    Excellent. And then the generators will just (1) decrease supply and (2) stop capital expenditure and hold the Government to ransom. Labour and the Greens, what morons. And the hypocrisy of them, decrying the loss of dividends from assets sold, then saying they dont want them anyway!!! I suppose they will have to borrow the $90m to subsidise consumers, so we’ll have an interest cost as well.
    toms – after Bradfords electricity reforms, the price of electricity went down. When Labour wound back some of those reforms, prices went up. When Labour, during the best economic conditions of a generation, decided it needed more to buy voters, it gouged millions upon millions from power companies and prices not surprising went up. Up over 70%. Neo-liberal insanity? Since the reforms worked, hardly.

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  12. Graeme2 (102 comments) says:

    Bread is getting a bit expensive David how about another Government body to centrally source bread for us. Can’t have these fat cat bakers making too much can we? Think how many jobs it would create.

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  13. JC (838 comments) says:

    Toad,

    Remember that various interest groups have overturned Pharmacs rulings on drug funding, eg, Herceptin and the Interferons.

    With power Winston will look for and get a deal on cheap power to the elderly, the Greens and Mana will get a deal for the bottom 30% of the population and everybody else will pay 40% more than they do now. Its taxation by stealth.

    JC

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  14. Grendel (873 comments) says:

    when the original premise is absurd, reductio ad absurdum is the best response.

    will the media ever challenge labour and the greens on any of their numbers? they want to know the minutae of a phonecall from 2 years ago, but when wussel starts throwing out crap about 90 million dollars or more, they are uninterested in the details.

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  15. freemark (324 comments) says:

    I guess they will be setting prices higher for the “rich pricks” and subsidising (bribing) their own supporters. Luckily this totally mental policy is being spouted now, plenty of time for all the lies to be exposed before next election. I bet it is uncosted, or they will trot out a lefty University Economist (for an under the table fee) to bullshit about how it will stack up. FFS.

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  16. pete (428 comments) says:

    @dpf that’s a clever trick – rely on a slightly inaccurate second-hand description of the policy from a journalist, rather than the policy itself. Then you can spread misinformation about the policy without it being obvious that you’re lying.

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  17. Liberty (211 comments) says:

    The Coalition of loses. Have a grand plan of turning New Zealand into the Cuba of the south Pacific.
    With its ghetto housing , Subsidized power along with the Cullens rusty train set.
    A utopia if you are a Marxist.

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  18. kowtow (6,690 comments) says:

    I don’t see the problem with politicians deciding things ,especially in the name of fairness and equality.

    Afterall that’s what we’re all “celebrating ” just now isn’t it?

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  19. Ross12 (927 comments) says:

    I don’t where the 5000 jobs comes from. To make that system work would require a hard nosed person with a laptop and few weeks work a year. Or are they going keep the fluctuating wholesale market and somehow have team of idiots buying chunks of power on a daily basis ( or something equally as bad ). Did Shearer ask Ms Clark and Dr Cullen why they happily collected the defacto tax ( ie. power company dividends ) for 9 years and happily allowed prices to go through the roof ??

    I did not hear it earlier but I believe Winston announced he would ( if in the position to do so ) merge all the power companies back into one ( except Contact obviously) and run the system more efficiently. Thats makes much more practical sense than the Lab/Green scheme.

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  20. swan (651 comments) says:

    Not only is the plan bad enough, it is being sold as creating five THOUSAND jobs??? WTF?

    Seriously this is desperate stuff

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  21. swan (651 comments) says:

    “A report by BERL economics estimated the creation of NZ Power would increase GDP by $450 million while creating 5000 jobs.”

    Seriously, Ganesh Nana needs to be tried for fraud. The prick.

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  22. CJPhoto (182 comments) says:

    Where are the 5000 job coming from. Contact has just over 1000, as does Genesis so 5000 is probably the whole industry.

    Are they trying to suggest that lower power prices will result in business hire 5000 more people – seems a long shot.

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  23. David Farrar (1,808 comments) says:

    I think the Soviet Union wants their five year plan back from Labour!

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  24. greenjacket (346 comments) says:

    So let’s get this right.
    The State has a monopoly on what it will pay generating companies for electricity.
    If the price is too low, then those companies will cut back their generation.

    Brilliant. Labour-Greens want to turn New Zealand into a 1970s socialist state, complete with the brownouts and powercuts.

    I think Labour were so desperate to say anything by Thursday that they just didn’t spend a few minutes understanding that in a market (electricity, food, whatever), when the price of a good falls demand for that good increases but supply will fall.

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  25. noskire (797 comments) says:

    Not only is the plan bad enough, it is being sold as creating five THOUSAND jobs??? WTF?

    Seriously this is desperate stuff

    I guess the jobs will be created as the Gweens undoubtedly think it would be friendlier to the environment if the “power” was hand-delivered to each household.

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  26. Pete George (21,804 comments) says:

    Anthony at The Standard (who obviously had early access to the policy release):

    New jobs via economic stimulus – not an economist myself but apparently BERL did the numbers.

    There will be 5000 newly created positions for fairies at the bottom of the garden.

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  27. davidp (3,319 comments) says:

    swan>Not only is the plan bad enough, it is being sold as creating five THOUSAND jobs??? WTF?

    They’ll be riding the stationary bicycles that power the generators at KiwiPower.

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  28. Nookin (2,887 comments) says:

    I am having difficulty seeing how a venture that will absorb all current employees in the sector and and will require a further 5000 additional jobs to make it work will lead to significantly lower prices.

    Shearer must get very dizzy as he flip flops on this.

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  29. alloytoo (337 comments) says:

    Time to invest in a generator.

    Rolling blackouts to come.

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  30. labrator (1,691 comments) says:

    @Labrator …

    That would be so stupid you need decisions made for you then? You can’t even come up with an answer let alone a rebuttal. Or are you awaiting for Labour to set up a Ministry of Rebuttals so that you can petition them do a rebuttal for you? Shearer could head it although he’s still working on one about how much money is in his secret US bank account. Maybe he could hire 5000 rebutallists to work in this Ministry, after all, he’s all about making jobs because in his and your fantasy land, we need other people to make our decisions for us.

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  31. lastmanstanding (1,154 comments) says:

    the really big worry is that given the numbers of idiots and morons that voted for the Socialist Party from 1999 to 2005 and the numbers of equally moronic who will vote Green this may well come to pass in 2014.

    Of course those of us who lived thru the Muldoon era know the folly of the STATE trying to control prices rents interest rates deposits on new and used cars the amount a car dealer could lend over a month to his customers to purchase a new or used car the list goes on.

    Do those of you who were still in nappies in the 70s/pre 1984 need more of a lesson on why this wont work.

    The new 5000 jobs will all be paid at plus $100K pa each as they will all be analysts consultants etc etc so work that out and add to the $300 pa times 2million households and ask Shearer/Wussell where the money coming from

    Oh I know Wussell got the idea. Just roll those printing presses and magic all fixed.

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  32. RRM (8,988 comments) says:

    They’ll be riding the stationary bicycles that power the generators at KiwiPower.

    LOL, they’ll need a few more than 5,000 riders! IIRC there was a stationary bike at MOTAT many years ago, illustrating that an average person could make something like about a quarter of a horsepower.

    Now, I happen to remember that Maraetai on the Waikato river has peak generation of 360MW, not a startlingly large power plant in the NZ scheme of things but nevertheless that’s equivalent to about 1.9 million stationary bikers…

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  33. labrator (1,691 comments) says:

    Now, I happen to remember that Maraetai on the Waikato river has peak generation of 360MW, not a startlingly large power plant in the NZ scheme of things but nevertheless that’s equivalent to about 1.9 million stationary bikers…

    Don’t tell Shearer or he’ll think he can “create” 1.9 million jobs!

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  34. Ed Snack (1,535 comments) says:

    I can understand where the jobs come from. There will need to be a lot of people employed to visit everyone’s house to lecture you on why you don’t need to use so much power and that we have to fairly share what power is available in an equal fashion.

    So if you don’t vote Labour or Green, there’s none available, sorry…

    What’s more, these are high powered highly paid jobs with great superannuation rights, but will only be available to terminally smarmy bastards who just KNOW what is good for others…

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  35. noskire (797 comments) says:

    They’ll be riding the stationary bicycles that power the generators at KiwiPower.

    I think you’re onto something davidp

    Prisoners made to pedal for power

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  36. metcalph (1,293 comments) says:

    All I can think of is that David Shearer does not want to lead the next government.

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  37. flipper (3,269 comments) says:

    Yeah, But Ross 12 why would those dicks exclude Contact? Nationalised, surely. All or nothing surely.
    Actually I think it will be nothing.

    I look forward to the reaction of big corporates, like the Todd Family (probably the biggest of all NZ corporates in terms of net worth if the truth came out) when Labour and the Greens go calling and beg.

    Last time (2011), the Todds gave equally to all major parties. I cannot imagine John Todd, KB, signing off on donations for 2014 when their company Nova will get axed by Shearer, Littler, Norman et al. John will rightly wonder whether Todd’s oil and gas interests will follow electricity.

    Quite apart from the economics (dodgy to say the very least), just plain silly, dumb politics.

    But, dear blog posters , do not hold your breath for the MSM to challenge their pets on the Labour/green pussies’ load of crap. :)

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  38. ross69 (3,637 comments) says:

    What this effectively means is that politicians will set the price of electricity

    Yeah you’d rather leave it to the market to rip off consumers.

    As for selling houses, there’s actually quite a bit of regulation to protect buyers and sellers. I suggest you visit http://www.reaa.govt.nz

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  39. OTGO (457 comments) says:

    “Time to invest in a generator.” Actually that is not bad idea. We already have generators at work for those times that the power goes off so why not have a small diesel set wired up and go off grid? Has anyone done the numbers on this?

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  40. dime (8,751 comments) says:

    BAHAHAHAAHAHAHAHA

    OH MY GOD!

    These idiots have lost it.

    “The average kiwi” – yeah. bet that doesnt include those earning over 100k. we are RICHHHHHHHHHHHHHHHH

    no point in debating this with facts. ridicule is the only answer.

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  41. PaulL (5,774 comments) says:

    California, here we come. Price controls on power, competitive providers. Result being blackouts and power shortages in one of the richest places on earth.

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  42. RRM (8,988 comments) says:

    On the other hand, aren’t there about 200,000 on the unemployment benefit? That’s 37 Megawatts right there! It’s not a lot, but it’s a start…

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  43. ross69 (3,637 comments) says:

    Of course, power companies – realising that the end is nigh – might wish to look at the profits they’re creaming from a captive market. Indeed, they might decide to take such action as to pre-empt Labour’s policy. That would be a smart move. It’ll be interesting to see which power companies (if any) are smart.

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  44. kiwigunner (184 comments) says:

    This is long overdue. Bradfords policy has failed. Power costs are too high in NZ. As for 5000 jobs how anyone on this site can complain about this stuns me – where are those 137,000 jobs that Key promised before the election? Jobs on the cycleway?

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  45. RRM (8,988 comments) says:

    Ross – I’m not sure pre-emptively changing your whole pricing structure and business model to suit a ludicrous political pie in the sky idea that will never ever EVER happen is what I’d characterise as a “smart” thing to do… ;-)

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  46. ross69 (3,637 comments) says:

    There will be 5000 newly created positions for fairies at the bottom of the garden.

    To be fair, the Marriage Equality Bill was always going to create jobs.

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  47. Mark (496 comments) says:

    How can they create a single buyer, NZ Power, to purchase all electricity generation at a fair price.

    Im going to buy my power from the power companies, or will this be illegal to engage in free trade.

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  48. rangitoto (144 comments) says:

    Labour and the Greens should have been sent to charter schools when they were kids to learn arithmetic.

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  49. ross69 (3,637 comments) says:

    Ross – I’m not sure pre-emptively changing your whole pricing structure and business model

    A straw man. Power companies simply need to get real that they cannot keep creaming it.

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  50. peterwn (2,933 comments) says:

    Just looked at todays Parliamentary questions. Q1 Grant Robertson to Prime Minister on power prices must surely be the patsie of the day.

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  51. greenjacket (346 comments) says:

    I have just been reading the Shearer policy.

    For a start, he accused power generation companies of “super-profits” – which shows he hasn’t bothered to read their annual financial reports or else he doesn’t understand what “super-profits” are or else he is straight up lying. I leave it for you to figure out whether Shearer is ignorant, a fool, or a liar.

    Then he stated there would be a single State power buyer. But if the State sets the price rather than the market, then there will be an inevitable shortfall in supply. So there must be rationing. Yet he didn’t bother to explain how the electricity shortage will be managed – rolling brownouts, targetted blackouts for specific areas, blackouts for people who go past their rationed electricity amount, or just random power cuts? Again, Shearer is either a fool or else he is not telling the truth.

    As to the extra 5000 jobs, I suspect Shearer is telling the truth here. Administering a State electricity rationing system would require an army of people to do things like calculate peoples electricity rations, devise where the blackouts should take place, etc.

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  52. RightNow (6,337 comments) says:

    We’ll be like North Korea, earth hour every hour.

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  53. dishy (199 comments) says:

    ross69, the Act to which you refer has nothing to do with regulating the prices of houses, and certainly not regulation by a single authority. It is chiefly about the conduct of agents in the sale and purchase process where agents are involved.

    “….leave it to the market to rip off consumers”. You must be joking. Do you not understand the connection between supply, demand, competition and price?

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  54. Ross12 (927 comments) says:

    Flipper — I should have said “excluding Contact , initially ” because as you say under Winston’s scheme it would eventually fail or be nationalised.

    A great spoof on Whaleoil
    http://www.whaleoil.co.nz/2013/04/labourgreen-co-press-release-on-electricity-generation/

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  55. kiwi in america (2,335 comments) says:

    Ross69
    It was your pals in the 5th Labour Government who were “creaming it” by demanding gauging dividends from its position as the shareholder in the SOE power companies. It took a privately owned Contact Energy to offer what are now today the cheapest power prices. Labour had 9 years to be oh so concerned about the plight of the workers as they allowed power prices to increase 70%!

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  56. Manolo (12,622 comments) says:

    On the road to more socialism. Down with Labour and the Luddites!

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  57. Right of way is Way of Right (1,125 comments) says:

    It’s not April 1st is it? This is simply ridiculous. As part of the policy, Labour state that they will forego dividends, this will save the average household about $200.00 to $250.00 dollars a year. But we will have a number of very interesting flow on effects.

    The amount of Kiwisaver funds with shares in power companies will take a hit. So, there goes a chunk of those investments. Next will be a big imbalance in our revenue gathering, so watch GST go up, and tax rates will rise, but not for the poor, oh no, and the rich will have accountants hit the loophole wagon, so that burden will fall square on the middle class again.

    Now, what power generation company will want to move in to NZ to develop and maintain power generation infrastructure? That’s right, no-one, so we will either have to stump up the cash ourselves, (Hello mr middle class taxpayer, did you have money left, well, not any more!), or we will have a power grid that will start to degrade, making this country a very poor place to do any sort of business. case in point….

    http://www.globalsecurity.org/wmd/world/dprk/images/dprk-dmsp-dark-old.jpg

    The flow on effects of this policy are many, and all of them are completely detrimental. Even the poor will end up suffering.

    How to ruin an economy in one easy step! They are either economic vandals, or economic morons!

    Households may save a couple of hunderd bucks a year initially, but our tax bill will increase by at least three times that before we get the ability to vote the bastards back out again!

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  58. lastmanstanding (1,154 comments) says:

    greenjacket

    I have it on good authority that rationing of power supply under a Labour/Green/Mana government will de decided by the number of votes these parties get at the 2014 election.

    So if you live in an electorate where these parties achieved the greatest numbers of votes compared to the Nats/Conservative and ACT ( if they are still with us) your supply will be secure.

    If however you live in an electorate where the above parties polled poorly then the numbers and length of your power blackouts will be reflected by those numbers.

    All perfectly straight forward and fair as far as I can see.

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  59. kiwi in america (2,335 comments) says:

    * gouging dividends – posted in a hurry

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  60. lastmanstanding (1,154 comments) says:

    Oh BTW privately owned and operated power generation will be banned with a penalty of 20 years in jail for anyone who trys to subvert the scheme I have outlined above.

    Of course this is in the best interests of the citizens and the GCSB will be targeting those who seek to frustrate the Gumints intent.

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  61. In Vino Veritas (136 comments) says:

    Kiwigunner – take your blinkers off. The numbers say that Bradfords reforms lowered prices. Labours changes to those reforms raised prices. If you expect Labour and the Greens to provide 5000 jobs in a business that buys and sells power electricity, you are quite mad. Seems to me that Shearer and Norman are taking a leaf out of the Greek Socialist handbook with this sort of policy.

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  62. tvb (3,938 comments) says:

    And if the generators do not like the price they are being offered because it is uneconomic what then?? I presume there will be no power. So we can blame power cuts on the Labour Government. What guarantee there will be continuity of supply. What about continuing investment for power generation. But then the Greens oppose that as well. Or will Labour order that happen under fear of being sent to Siberia if they do not supply or invest. I just hope National win this political argument. But it needs a full analysis and pulled apart point by point. Stephen Joyce should be good at that.

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  63. alloytoo (337 comments) says:

    @Right of way is Way of Right

    Spot on, frankly I’d rather have Wussel print money, it would cause less damage long term.

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  64. All_on_Red (941 comments) says:

    This is excellent news. At last the communists in the Greens and Labour are showing their true colours. I doubt even their apologists and supporters in the MSM can cover this up. I look forward to Russell Norman being honest with the NZ public about the consequences of this.
    Seriously how shallow is the depth of thinking in those Parties. What a bunch of morons. They have no fucking idea.

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  65. Urban Redneck (234 comments) says:

    These left-wing economic proposals are an indication that Labour have taken a big step to the left in terms of it’s economic policies – in part, it’s to compete with the Greens for that part of the ideological landscape. But recall, Helen Clark’s ministry left most of the legacies of previous economic reforms – the Reserve Bank Act, the State Sector Act, the Public Finance Act, and the State Owned Enterprises Act, the Fiscal Responsibility Act – untouched for the most part. Clark’s government was more concerned with inflicting its pathological social engineering agendas onto the country, and that is still bearing fruit even to this day.

    Any future Labour/Green coalition will result in economic and cultural ruination. But in a way, that’s precisely what needs to happen before any enduring change to the status quo can be achieved.

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  66. dime (8,751 comments) says:

    i guess this is what happens when you have to invent policy in 3 days.. and you happen to be an idiot.

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  67. Akld Commercial Lawyer (138 comments) says:

    Oh dear

    The list of obvious defects with this attempt to de-rail the MRP sale process is endless. I regard it as little more than a political stunt to try to grab attention from a sale process that looks very likely to be heavily oversubscribed.

    Others in this thread have already pointed out the problem with command style rationing of products that have a cost to generate – namely that if the artificial price point is below the marginal cost of generation then the lights go out. This will be particularly evident for peak generators. Imagine we will all be getting up in the wee small hours to do our laundry – I don’t think so. It brings back visions of a former colleague who does World Bank projects in 3rd world countries (I am sending you this email while we have electricity between the hours of ….).

    The statements about power prices and jobs production are farcical (and scandalous if BERL have been quoted correctly).

    My favourite lines are those about the policy being likely hit the share price of power companies, including MRP – and that Shearer had written to the MRP board and to shareholding ministers asking them to issue a supplementary disclosure (to the offer document). I would dearly love to write the reply – it would start with there is no need, as the absence of any reference to this stunt is not material (because it is no more than a political stunt and does not have a bolter’s show of being implemented).

    As I shake my head in wonder at this and the nonsense about Orcon earlier this week – I worry that there is no-one in the Labour cacaus with an ounce of commonsense or business acumen that can spot the Baldrick factor with these utterings before they are made public. For example, look what happened with Transpower – when the last lot would not allow it to get a sensible return on the taxpayer’s capital. It under-invested in the national grid and we are playing catch up now.

    We deserve better – in the form of a credible, economically literate opposition.

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  68. dishy (199 comments) says:

    So Shearer is “not prepared to sit back while power companies blah blah blah bellyache bellyache”. Well bully(shit) for him.

    If that’s so, then instead of proposing this hare-brained scheme, why doesn’t he bugger off overseas with his millions (sorry: “family savings”). I’m sure they’ll be very happy together. It will make us happy, too. Everyone’s a winner baby, that’s the truth.

    At least people who buy fair price / trade coffee get to have a smug cup of self-satisfaction.

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  69. expat (4,048 comments) says:

    Viva la revolution comrade.

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  70. JC (838 comments) says:

    Of course, this could just be a nuclear option to kill the power company sales. If successful Labour and the Greens could then back off and propose another seemingly more rational solution.

    JC

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  71. JC (838 comments) says:

    What happens to business prices in an environment where a big chunk of the power is purchased on the cheap for the population?

    Yeah, the cost per business goes up to subsidise the cheap power.

    And what about working from home.. do you get two power bills? You can see why they need an extra 5000 employees.

    JC

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  72. expat (4,048 comments) says:

    labour had Key in the ropes over GCSb etc and now they pull a retarded stunt like this.

    Gimme a L,O,S,E,R,S!

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  73. Bob (442 comments) says:

    Good, then perhaps they can forgo tax and income from petrol. Why not buy petrol from the refineries and pass it on at cost. They seem to forget Michael Cullen pushed the electricity suppliers for more and more dividend. Any tax given up will have to be supplied from elsewhere.

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  74. hamnidaV2 (247 comments) says:

    An excellent idea. Finally high power prices will come to an end.

    There is nothing wrong with confiscating the assets of greedy capitalist scum.

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  75. expat (4,048 comments) says:

    Hammy how about you go and live in Cuba or Nth Korea and enjoy the bounty of the communist promised land.

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  76. Ed Snack (1,535 comments) says:

    What is simply insane to me is Shearer saying that the generators have made “super profits”, when there is one simple and obvious reasons for this: First and foremost it was a political act by the Clark administration to gouge the state owned power companies for cash that was behind the way beyond CPI rise in the price of power. It was a de facto tax on power and a purely political act.

    Thus the huge cost increases to consumers was a direct consequence of government ownership of the majority of the generation. And they want to increase the degree of government control and expect that will simultaneously cut costs and increase jobs. WTF, I expect this level of “unicorn droppings” economic understanding from the Greens as they’re basically seriously delusional people, but I had thought that Shearer might have had some better advice from somewhere. I guess he thinks it will play with the core labour voters, those too stupid to think for themselves.

    Seen as a political stunt to attempt to undermine the MRP float, it does make some sort of nasty sense though.

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  77. scrubone (2,971 comments) says:

    I don’t see the problem with politicians deciding things ,especially in the name of fairness and equality.

    Afterall that’s what we’re all “celebrating ” just now isn’t it?

    Beat me to it. It’s all equality, isn’t it.

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  78. peterwn (2,933 comments) says:

    To Contact and Todd, add Trustpower and its significant shareholder Infratil.

    Also add Origin Energy Australia (majority owner of Contact), so some Australian toes are trodden on, which could rebound on LUMO, Infratil’s retail electricity brand in Australia.

    The sovereign risk in investing in NZ is now likely to be greater than in Fiji (the junta there appreciated the need for investor confidence).

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  79. alex Masterley (1,438 comments) says:

    Hamnida,
    Fine piece of analysis there son.
    Now go outside and play while the adults debate this nonsensical policy.

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  80. scrubone (2,971 comments) says:

    There is nothing wrong with confiscating the assets of greedy capitalist scum.

    If we’re going there, how about the proposition that there’s nothing wrong with shooting communists?

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  81. Kimble (4,092 comments) says:

    Looks like BERL is counting the +’s and ignoring the -’s again.

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  82. RightNow (6,337 comments) says:

    Labour is promising to cut the average Kiwi power bill by up to $330 a year if elected to government.

    Or you could just use http://www.powerswitch.org.nz/powerswitch and not have to suffer the economic destruction inherent with Labour and the Greens

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  83. ChristineY (7 comments) says:

    So every household would save $5 to $6 a week, they could use it to buy a Lotto ticket or an extra Big Mac

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  84. Mark (1,301 comments) says:

    This is the sort of dumb ill conceived policy that if you win the election you wish like fuck had not seen the light of day.

    Given electricity generation is a small factor in Todd Energy’s oil business it would not be the end of the world but they will hate it all the same.

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  85. expat (4,048 comments) says:

    LOL

    Kia ora

    The Green Party has just released our plan to cut your power bills. Our plan could save you up to $300 a year.

    Given that power bills have gone up around $100 on average over the past year, that is a big saving for families.

    Share this image on Facebook to help spread the word:

    Our plan, Empowering New Zealand, has three components that will deliver all New Zealanders cheaper and greener energy. Our costed plan will:

    1. Establish a single buyer that will negotiate cheaper power prices for all of us

    2. Deliver you cheaper power by giving each household a block of low cost electricity every month

    3. Strengthen the role of energy efficiency and green energy within our electricity system.

    The centrepiece of our plan is a new Pharmac-style agency named NZ Power that will drive a hard bargain with the electricity generators and directly pass on the savings to you, the customer.

    Just like Pharmac bargains to get you cheaper medicine, NZ Power will secure us cheaper power.

    As a big company, Tiwai Point has been able to directly negotiate cheap power from Meridian for years. NZ Power will act in the same way for your household.

    NZ Power will also act in the interests of our environment by steering us towards a cleaner, greener energy future rather than leaving generation decisions to profit hungry private companies.

    You can help spread the word on this smart green idea by sharing the infographic on Facebook and letting your friends know about how much money they could save.

    And you can find out more about our proposal here.

    It is time for a better energy future. We are committed to delivering it.

    Thanks

    Dr Russel Norman
    GREEN PARTY CO-LEADER

    greens.org.nz/energy

    Unsubscribe from email alerts
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    Mailing address
    Parliamentary Office, Parliament Buildings, Wellington, New Zealand
    Telephone: +64 4 817 6700

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    Authorised by Metiria Turei and Russel Norman, Parliament Buildings, Wellington.

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  86. rouppe (852 comments) says:

    So how will this work for the people that are off-grid? Or are grid-attached private generators like that fella on SH1 in Tawa with the two wind generators…?

    What about Jeanette who has a sea of solar panels? Can she only sell the power to the governement agency so they can sell it back to her?

    And of course being charged with concentrating on renewable energy means concentrating on high-cost energy production anyway…

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  87. unaha-closp (1,033 comments) says:

    The policy appears to be a guarantee of small profitability for all power producers, irrespective of how much the power costs to produce. To maximise profits producers would be better off having expensive power generation than inexpensive.

    Buy shares in windmill builders.

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  88. insider (990 comments) says:

    @ mark i think todd will love it as will corporate lobbyists. A clueless govt and bureaucracy will be hammered by ‘unavoidable’ production cost increases and lobbying for redetermination
    of prices. and what minister won’t pay if the risk is lights going out? wind farmers may be unhappy as they get despatched at $0 so are always first in the generation stack. if they despatch at cost they may be one of the last.

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  89. dime (8,751 comments) says:

    so all the billing etc will be done through this new company?

    what about all of the people that do those jobs for the power companies? will they just be let go?

    this policy is going to destroy jobs? :O :O

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  90. lofty (1,295 comments) says:

    Shameful and disgusting saboteur tactics….it has not and will not put me off buying MRP shares, completed the application the minute I saw the bulldust policy of the greens and their lapdog labour.
    Policy on the hoof.
    Never give in to bullies and liars!
    Labour seem hellbent on keeping the disaffected labour voters precisely that.

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  91. Spoon (99 comments) says:

    A few dollars off companies power bills will encourage them to hire 5000 new staff! Similarly, increasing the minimum wage (and therefore pushing up all wages) will encourage companies to keep all current staff employed.

    Wait, what? Is that hypocrisy I smell?

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  92. dime (8,751 comments) says:

    spoon – lol

    they are an absolute joke.

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  93. snice1 (28 comments) says:

    I find it interesting that both Labour and the Greens were complaining that selling a minority stake in MRP would reduce government dividends. Seems that this policy is set to reduce them further.

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  94. Pete George (21,804 comments) says:

    2. Deliver you cheaper power by giving each household a block of low cost electricity every month

    Any indication how they are going to do this? Provide a subsidy to every electricity retailer? Force retailers to restructure their pricing models?

    I presume this is included in their costings.

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  95. scrubone (2,971 comments) says:

    But seriously, isn’t there some sort of law against communists being elected?

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  96. Pete George (21,804 comments) says:

    This is how they plan on doing it:

    How will NZ Power pass on savings to households and businesses?

    NZ Power will sell retailers a block of electricity (300kWh for each household) at low cost. When retailing and lines charges are added, this block of electricity will cost households about two-thirds of the current retail price for electricity.

    Based on estimates of the difference between the wholesale cost of electricity at present and the average cost that NZ Power would seek to achieve, the savings per household would be worth around $300 a year.

    Businesses would also benefit by NZ Power passing on the lower average cost of wholesale electricity, rather than the current high marginal price.

    Why not just make all electricity cheaper, rather than use Progressive Pricing?

    It’s important for energy efficiency that electricity users face the full cost or full savings of increasing and decreasing their electricity use at the margins. That’s why households will receive a low-cost block of electricity worth around $300 a year in savings but pay the full (marginal) price for electricity above that point.

    That way, when a household makes the decision to increase their electricity use, they will be paying the full cost of increasing electricity generation and when a family uses electricity more efficiently, they will enjoy the full savings resulting from eliminating the need to generate that electricity.

    http://www.greens.org.nz/sites/default/files/empoweringnz_qa_final.pdf

    It looks like the Greens have talked Labour into going with their policy.

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  97. RightNow (6,337 comments) says:

    “300kWh for each household”

    In other words it’ll be a shit deal for any household with more than one resident.

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  98. rangitoto (144 comments) says:

    What is the real price when the greens ETS hike is added?

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  99. wally (58 comments) says:

    Makes just as much sense:

    Kia ora

    The Green Party has just released our plan to cut your food bills. Our plan could save you up to $300 a year.

    Given that food bills have gone up around $100 on average over the past year, that is a big saving for families.

    Share this image on Facebook to help spread the word:

    Our plan, Emfooding New Zealand, has two components that will deliver all New Zealanders cheaper and greener food. Our costed plan will:

    1. Establish a single buyer that will negotiate cheaper food prices for all of us

    2. Deliver you cheaper food by giving each household a block of low cost brown rice every month

    The centrepiece of our plan is a new Pharmac-style agency named NZ Food that will drive a hard bargain with the farmers and growers and directly pass on the savings to you, the customer.

    Just like Pharmac bargains to get you cheaper medicine, NZ Food will secure us cheaper food.

    NZ Food will also act in the interests of our environment by steering us towards a cleaner, greener food future rather than leaving growing decisions to profit hungry private companies.

    You can help spread the word on this smart green idea by sharing the infographic on Facebook and letting your friends know about how much money they could save.

    And you can find out more about our proposal here.

    It is time for a better food future. We are committed to delivering it.

    Thanks

    Dr Russel Norman
    GREEN PARTY CO-LEADER

    greens.org.nz/energy

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  100. duggledog (1,107 comments) says:

    This policy, which must be the most jaw-droppingly absurd idea from the home of jaw-droppingly absurd ideas, was given the princely amount of 2 minutes for discussion on National Radio (predictably).

    Instead, they led The Panel with SST’s new Judging the Judges website, as they did on Nine to Noon this morning.

    National, why do you continue to fund this radio station with so much money when it is simply a platform diametrically opposed to anything you try to do?

    Someone please wake me up from this fucking nightmare!

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  101. Pete George (21,804 comments) says:

    The media are on to the stupidity. Are Labour oblivious or devious?

    H du Plessis-Allan ‏@hdpaNEWS

    Contact’s share price is down 3% after Labour/ Greens announced power regulation plans. If it affects MRP similarly, it’s less $ for us all.

    Grant Robertson ‏@grantrobertson1

    @hdpaNEWS its actually lower power prices for us all, which is more money in your pocket, which gets spent elsewhere in the economy.

    Probably both.

    It was obvious Shearer didn’t have much of a clue, but Robertson seems to have really revealed himself over the last few weeks.

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  102. Pete George (21,804 comments) says:

    And Colin Espiner doesn’t hold back:

    http://www.stuff.co.nz/national/blogs/bull-dust/8568124/Labours-crazy-new-energy-policy

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  103. Manolo (12,622 comments) says:

    She is Soper’s I’m-in-the-tank-with-Labour wife.

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  104. Ross12 (927 comments) says:

    So it seems that the 5000 jobs are going come from everyone spending their saving of $300/yr. I thought NZers had got into the savings habit in the last few years. I don’t think the savings busineses might make on their power bills will enable many people to be employed.
    The Greens idea of trying get people to save on energy use –thats fine but if people have not trying to do this in the last 5+yrs with electricity price increases then they will never do it. So that argument fails.

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  105. Fisiani (852 comments) says:

    http://www.theatlanticcities.com/technology/2012/12/new-highly-detailed-image-north-koreas-lack-electrical-infrastructure/4201/

    I would encourage you to click on the link and see what happens at night in North Korea (which has Labour/Green ideas on power) and South Korea which has NZ ideas on power.

    Baby when the lights go out……..I’ll show you what it’s all about.

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  106. Pauleastbay (5,030 comments) says:

    David and Russell over a coffee:

    Lets just say everything will be free when we get elected because at the moment when we come up with a really good idea like buying all the power people laugh at us.

    Buying all the power and selling it will save people $6 a week thats the price of a Heineken at the wholesaler, whats not to like about our plan?

    We will be able to set up this massive bureaucracy with commissions and inspectors, buy heaps of utes and Koru memberships for the party hacks, its going to be mint Russ.

    Can’t people understand that putting another layer of non producing management into any supply chain always makes things better and cheaper, the critics sure are mongs Dave

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  107. muggins (2,900 comments) says:

    So what does all this mean so far as the Mighty River share float is concerned. My thinking is some people who were thinking of buying shares will drop-out, because of the uncertainty. The float will still be oversubscribed, but the worry will be that if a Labour/Green coalition were to look like they were going to win next years election then the share price could drop below the issue price. If the Labour/Greens were to win the election the dividend could drop from 6 to 7% to 4 to 5%.
    The banks are paying 4%.
    So one buys the shares and gets a 6 to 7% gross return for a year and then hopes like hell National gets back in, so that the share price does not drop and that 2/3 % premium over fixed interest is not wiped out by the investment dipping below the issue price.
    Funny how things can change. A number of sharebrokers were saying last year that Chorus shares were the shares to buy . They went up to $3.50 but are now selling for $2.80.

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  108. muggins (2,900 comments) says:

    Correction.
    Chorus shares are now selling for $2.63, after a high of $3.60 last year.

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  109. slijmbal (1,133 comments) says:

    I’m happy – this shit means I should get more shares from MRP —

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  110. ross69 (3,637 comments) says:

    Contact’s share price is down 3% after Labour/ Greens announced power regulation plans. If it affects MRP similarly, it’s less $ for us all.

    Heather du Plessis Allan is not the sharpest knife in the drawer. She ignores the fact that any power company could take the bull by the horns and pre-empt Labour’s policy.

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  111. kowtow (6,690 comments) says:

    Watched this on the news.

    Very interesting joint broadside from Labour and the Greens.

    A straight forward $300 bribe offered to the electorate,that’s how to win elections. Bribe voters to authorise your thieving intentions.That’s just for starters,what other goodies will be on the table?

    I reckon the Nats better get ready for a few terms in opposition,and after their 2 terms ignoring what could have been their support in this upcoming GE they deserve a drubbing.

    I ‘m just pissed off a left wing coalition will crash the economy.But I blame the Nats for not being National enough.

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  112. GPids (14 comments) says:

    One of the positives of this policy is that national will have a legitimate excuse to bring back the cartooned dancing cossacks that they used during that election campaign in the 1970s. On a more serious note, is this honestly the best policy for electricity the left can come up with? So disappointing…

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  113. Pete George (21,804 comments) says:

    Curious – One News mentioned the drop in Contact Energy share price (4.5%) in their 6pm news coverage of the Labour-Green Power plan, but 3 News didn’t mention it – and they also didn’t show any sign of Contact in their business news.

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  114. OneTrack (1,960 comments) says:

    The communists show their true colours at last. I just expected to say this about the Greens, not Labour.

    Or is this just the first example of the grand coalition in action. Shearer moves his lips, but Metiria and Russel write the words and push and pull the levers behind the curtain.

    Viva the revolution, comrade.

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  115. Nookin (2,887 comments) says:

    Scrubone

    “But seriously, isn’t there some sort of law against communists being elected?”

    No. It is usually the other way round. Once elected they pass a law so that they don’t become un-elected. Labour has had a couple of training runs already. The Electoral (Theft Legitimsation) Bill and the “Validate Harry’s Election Even Though he Wasn’t Eligible Bill both seemed to work OK and the constitutional ramifications are now forgotten.

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  116. kevin_mcm (152 comments) says:

    Has anyone else read the BERL report on this – what an absolute joke! They have taken all the cost reductions and totally ignored the loss of revenue/dividends arising from the lower prices. Seriously flawed.

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  117. Pete George (21,804 comments) says:

    It looks like this policy has encouraged the left of Labour if this from IrishBill is anything to go by:

    First let me say that the NZ Power policy is some of the best progressive policy I’ve seen for a long time – it’s so good to see a real move to break with the Chicago School consensus. And it’s good to see the right caught off guard and resorting to showing the ugly abusive face they usually keep in check. Remember, in politics losing your cool is losing.

    But let’s also be clear that this is a policy that threatens the transfer of wealth from the elite to the people and, once they gather themselves, the elite will come after this policy hard. Not only to stop NZ Power, but because they know that if it gains traction then it might embolden the electorate to embrace other social democratic policies.

    http://thestandard.org.nz/tiger-by-the-tail/

    The policy has to pass media scrutiny (there is already some disquiet shown) and market reaction first.

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  118. kevin_mcm (152 comments) says:

    Not only that but this shows a total lack of understanding of how markets work. So instead of price rises encouraging energy conservation /alternatives such as solar, we will now have a market signal that says demand more energy and at the same time a signal to supply less energy – so what happens when the power generators turn off expensive (oil based) energy sources (because the selling price is too low) and the demand exceeds supply – roll on rationing which is the normal outcome of controlled prices. Perhaps all the employment is for civil servants to work out the allocation of energy on a house by house basis.

    And then the powers that be decide we need more energy so they crank up the oil & coal based stations – great green policy!

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  119. ross69 (3,637 comments) says:

    A straight forward $300 bribe offered to the electorate,that’s how to win elections.

    Well, it’s a drop in the bucket compared with National’s bribe of cutting taxes for the wealthy. Not to worry, we can just borrow more.

    $300 is so small that every power company could give that to customers now and still be very profitable. Indeed, if they did so, they would call Labour’s bluff. I wonder which operators will do so, and which ones will moan.

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  120. ross69 (3,637 comments) says:

    On a more serious note, is this honestly the best policy for electricity the left can come up with?

    As opposed to no policy and rising power prices on the Right? Yeah that policy is a real winner with consumers…

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  121. Jim (385 comments) says:

    I have a couple of suggestions for Labour to halt the exodus of Kiwis too:

    1. Require airlines to balance the number of NZ citizens on inbound and outbound international flights. Departing flights will not be given clearance if sum(outbound kiwis) exceeds sum(inbound kiwis) for all prior flights of that airline since this becomes law.

    This will create 10,000 jobs in the boatbuilding industry.

    2. Alternatively require a $100,000 bond or deposit of first-born child to emigration detention centre for all outbound travellers.

    There, solved!

    Edit: this should be put in place well before the electricity reforms.

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  122. Nookin (2,887 comments) says:

    There will be a differential. The unit cost in Remuera will have a differential of 2.5 applied. In South Auckland and in any marginal labour electorates it will be 0.75. There will be an NDA (No Differential Area) withing three blocks of any residence occupied by Len Brown.

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  123. slightlyrighty (2,448 comments) says:

    Unreal……

    $330 a year savings, or $6.34 a week, or 15 cents an hour for a worker on a 40 hour week. National recently upped the minimum wage by 25 cents, having previously raised it by 50 cents in 2012.

    Whereas this dogs breakfast of a policy may have the effect of lowering your power bill, but at what cost?

    Assuming 2 million households, $330 per household is $660,000,000. Labour want the minimum wage to go to $15 an hour. The greens want a living wage of $17 an hour. This policy will create $5000 jobs (Yeah right!) which at $17 an hour is $176,800,800. Of course that wage bill will be substantially higher. This is an amount of $800,000,000. Of course these $5000 jobs won’t be new jobs. By the time you factor in the cost of nationalisation, compensation, redundancies, recapitalisation……

    Do you really think that the average household will be $6.34 a week better off?

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  124. Reid (15,530 comments) says:

    What is wrong with lefties?

    What don’t they understand about: is this way more efficient than that way?

    What don’t they understand about: this isn’t your money, it’s ours?

    Everything, apparently.

    What they look at is: is this way going to sabotage a very expensive policy damn the eventual cost to the taxpayer after promulgation and implementation?

    So what really is wrong with lefties?

    Beats me.

    All I know is, I just don’t like them.

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  125. kowtow (6,690 comments) says:

    But,but ,but you all wanted the equality that Labour and the Greens promise!

    Why moan now when they deliver ‘equality’ in the electricity market?

    I want to go out and celebrate this marvellous and proud achievement!

    Isn’t equality wonderful.

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  126. Nookin (2,887 comments) says:

    I imagine that NZ Power will be managed by IRD

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  127. emmess (1,333 comments) says:

    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.

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  128. Tom Jackson (2,235 comments) says:

    This is the beginning of the end for you lot. No wonder you are all screeching.

    The policy will work acceptably well. It certainly won’t have the dire consequences you lot are predicting. It’s been tried and works elsewhere. It will mean what it says: cheaper power. Hell, power was cheaper under the old NZED, and Labour isn’t even suggesting that.

    GTG, some armed homosexuals just flew past my window. Help!

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  129. Tom Jackson (2,235 comments) says:

    What is wrong with lefties?

    What don’t they understand about: is this way more efficient than that way?

    What don’t they understand about: this isn’t your money, it’s ours?

    Everything, apparently.

    What they look at is: is this way going to sabotage a very expensive policy damn the eventual cost to the taxpayer after promulgation and implementation?

    So what really is wrong with lefties?

    Beats me.

    All I know is, I just don’t like them.

    There’s nothing wrong with us. We’re just a lot smarter and more sophisticated than you. That’s why we look odd from your perspective. ;-)

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  130. labrator (1,691 comments) says:

    It’s been tried and works elsewhere

    Citation required, where, other than North Korea and Cuba.

    While you’re at it, tell us how this amazing new policy could apply to other things Labour don’t like, like high food prices. It was cancelled GST on fruit I think they came up with then. There are only two major supermarket chains in NZ, should Labour & the Greens nationalise supermarkets to ensure cheap food prices for us too?

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  131. Reid (15,530 comments) says:

    That’s why we look odd from your perspective.

    It’s not when you look odd that worries me Tom, it’s when you look mental that you’re really dangerous, and you’re looking a lot like that right now.

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  132. ross69 (3,637 comments) says:

    Meanwhile, National’s rating has taken a hit. I guess the public are slowly getting the message that their illustrious leader is all sizzle and no sausage. On the upside, we can all look forward to cheaper power.

    http://www.stuff.co.nz/national/politics/8569881/Poll-Nationals-support-takes-a-hit

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  133. Kea (10,451 comments) says:

    If Labour & the Greens were serious about lowering energy costs, then they would be fighting to free up the means of energy production. Instead they oppose dams, coal, oil, thermal and anything else that actually works.

    They advocate punitive taxes on efficient energy, to fund the AGW industry, while our old people die in their freezing houses because they can not afford to heat them. This is a disgraceful situation in a modern and reasonably wealthy modern society.

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  134. Sidey (230 comments) says:

    John Key should call a snap election now. Go on the attack & present the country with GreenLab’s various mad schemes in all their glory. Spell out what it will mean for us in real terms. Give voters a choice – either a clear signal that we don’t want this bunch of economoterrorists anywhere the levers of power, or we do. If the latter, I for one wouldn’t blame JK for retiring to Hawaii and leaving us to it.

    I don’t speak Polish and know nothing about shipbuilding, but a decent stint in a retraining facility somewhere suitably cold and I’m sure I’ll be re-educated enough to join the collective effort, should I be called upon. Not really a cap wearer either, but maybe the cloth will be edible.

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  135. PaulL (5,774 comments) says:

    @ Ross:

    As opposed to no policy and rising power prices on the Right? Yeah that policy is a real winner with consumers…

    Have you been ignoring DPF’s interminable posts on this matter? Power prices went up drastically under Labour, under National the rises have been much lower. How does that accord with your argument that the Right have no policy on power prices – do they just achieve it through dumb luck? If so, I’m happy to vote for dumb luck, I’m all in favour of measuring outcomes.

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  136. alloytoo (337 comments) says:

    @ Tom

    Yes Tom, it worked in South Africa, artifically low prices gave way to rolling blackouts because no new capicity was created. The rolling blackouts further destroyed the infrastructure because they had let their maintaince slip. The generator had to push through huge increases and borrow stacks of money in order to build new powerstations,

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  137. UglyTruth (3,008 comments) says:

    “Those of us stuck deeply into the engineered left/right paradigm have no desire to be objective, and are thus blinded to all truth that does not reinforce biased opinions.” Jack Speer-Williams

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