Power prices are rising. And evidence suggests that in New Zealand, the sector charges too much for power: billions too much. But energy companies get away with this because they’re “playing within the rules”. The only silver lining to this dark cloud is that – because most of the assets are state-owned – most of the excess profits flow back into hospitals, schools and other public services.
Currently, much of the profit from power companies is returned to us for the good of the New Zealand public.
But National want to change this. It is not that they want to stop power companies charging too much. No. Instead, they want to start selling off the energy companies. This will mean that the excess profits will flow to new shareholders. History tells us that shares sold in this kind of situation (supposedly ‘to mum and dad investors’) are later on-sold to multi-national companies; then the profits flow off-shore. It happened when National sold Contact Energy, and it is crazy. Power prices stay high, but the profits that used to go to our schools and hospitals now go to fat-cats overseas.
Labour will not sell off the family silver. This is an important difference between Labour and National as we head towards the next election.