Labour on electricity assets

Chris Trotter writes:

Speaking to a group of corporate head-hunters on July 11, Mr Parker spelled out the details of Labour’s policy on foreign investment. Concerned to prevent “infrastructure assets with monopoly characteristics” from being sold to offshore buyers, Labour, 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 asset sales”; 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.