Phil O’Reilly open letter wrong on many counts

It will comes as no surprise that Labour disagrees with the open letter from Phil O’Reilly and others, says Labour’s Finance spokesperson David Parker.

“Labour is absolutely committed to lower power bills for New Zealand households and businesses. NZ Power will reduce bills by $230 – $330 a year for families and commercial bills by 5 – 7 per cent.

“The letter from Mr O’Reilly does not cure the current problems in the uncompetitive electricity market. Prices have increased since the independent report from Professor Wolack found $4.3 billion of overcharging. The system must be fixed.

“Currently super-profits are made on the back of our public resource – free water. This must be addressed if power bills are to be lowered. Mr O’Reilly again offers no effective solution.

“There are several other mistakes in the letter. There are no subsidies involved. It is remedying overcharging and will increase retail competition, and enable new entrants into generation.

“The current policy settings have failed. NZ Power remedies those failures. Contrary to Mr O’Reilly’s claims this is not a regressive step into the past.

“The letter repeats the National Government’s scaremongering about investment. The NZX stock exchange is up since the announcement. There is no investor flight or fear. It is irrational and damaging to markets and the New Zealand economy to claim there is.

“Rather than having a negative impact on business and jobs, independent economists Berl has found that it will see a $450 million boost to the economy and create 5,000 jobs. Our policy reduces costs to households and businesses. That’s good for the economy.

“The letter appears to want households not to use more electricity. Many of our children are growing up in cold, damp homes and our elderly often cannot afford to switch on the heater. It seems somewhat callous to suggest higher power bills are good as poorer New Zealanders use less electricity rather than adequately heat their homes.

“Phil O’Reilly’s criticisms of this policy are incorrect. Mr O’Reilly has made no effort to contact Labour to discuss this policy. If he had some of his errors would have been avoided,” says David Parker.

Supportive commentary about NZ Power

New Zealand Manufacturers and Exporters Association

New Zealand Grey Power Federation

Geoff Bertram, from the Institute for Governance and Policy Studies at Victoria University

Power industry consultant, Bryan Leyland

Consumer New Zealand chief executive Sue Chetwin

NZ Council of Trade Unions

Generation Zero

Child Poverty Action Group

2nd May 2013 Media Statement

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Author: David Parker MP

I am a List MP for the New Zealand Labour Party, and Spokesperson for Trade & Export Growth and Treaty of Waitangi Negotiations and the Shadow Attorney General

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