National’s hysterical reaction to Labour’s plan to lower Kiwis’ power bills by $230 – $330 a year shows that National has no comeback, says Labour’s Finance spokesperson David Parker.
“National is hurling all sorts of inaccurate insults at the NZ Power policy and muddying the waters. Their scaremongering shows they’re worried that hard-working New Zealanders who are sick of paying through the nose for electricity will embrace our new policy.
“Labour’s policy is quite clear. It will reduce power prices through two means.
“First, the single buyer NZ Power will buy electricity from generators on behalf of all New Zealanders at a fair price, based on their actual production costs and return on capital. It will not allow the companies the super profits from older hydro generation they get currently.
“Second, NZ Power will sell that wholesale power to retailers. As generators will be structurally separated from their retail business there will a level playing field and barriers to entry will be lowered. This will increase retail competition and lead to lower prices.
“Companies will still get a return on investment for new generation through long-term contracts with NZ Power.
“National’s outrageous threats that the policy will destroy savings and jobs are flat-out wrong. Independent analysis by economists shows that lower power bills for businesses will provide a $450 million boost to the economy. That will create 5,000 new jobs. Lower power bills can increase savings, not lower them.
“Two of Kiwis biggest concerns are the cost of living and job security. This plan helps on both fronts.
“At the 2006 briefing to Cabinet, summarising MED’s advice on alternatives including amalgamated SOEs and a single buyer, the overriding concern of Cabinet was the need to avoid investment uncertainty during the transitional period given that electricity margins were at that time perilously thin.
“I have always been on record about my serious concerns about the limits to competition under the Bradford reforms, which costs consumers through higher power bills,” says David Parker.
19th April 2013 Media Statement