Dom Post on Labour and power prices

The Dom Post editorial:

There are good reasons to be cynical about Labour leader David Shearer’s vague promise to rein in power prices if he becomes prime minister next year.

It’s like King Canute claiming he can stop the tide – except King Canute knew he couldn’t.

First, it will have escaped nobody’s attention that Labour had plenty of time to ease the burden of electricity costs for households and businesses during the nine years it was in government from 1999 to 2008. But instead of putting in place measures to achieve that, it presided over a nearly 70 per cent rise in prices and happily raked in more than $3 billion in dividends from the state-owned power companies.

And this was a time of record surpluses.

Clearly, Labour had no problem with families and small businesses being hit with unnecessarily inflated electricity bills when the cash was helping to fund its big spending policies. That only appears to have become a concern once it was turfed out of office.

Exactly.

Mr Shearer says the policy has arisen from the prospect of power prices soaring further once 49 per cent of Mighty River Power, Genesis and Meridian are sold into private hands. However, as the price gouging by the three companies between 2001 and 2007 showed, vesting full public ownership in a power company does not necessarily guarantee lower prices. Indeed, figures issued by Energy Minister Simon Bridges in February showed that, at that time, private companies were offering the lowest rates in 15 of the 21 regions on the Powerswitch website, which allows consumers to compare prices.

What matters is having choice and competition, not ownership.

It is difficult to escape the conclusion that Mr Shearer’s main aim in announcing the policy the day before the first shares in the part privatisation of MRP were offered to New Zealand retail investors was to dampen down interest in the sale. The woeful lack of detail only supports the view that it has been made up on the hoof and rushed out as a last-minute sabotage tactic.

Sabotage is a good word for it, but it was such a pitiful attempt at sabotage, with no details, that it was more like a damp fire-cracker.