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Extra Electricity Prices An Unscrupulous Tax Grab

The electricity market is not working with price rises going unchecked by competitive pressures, the Employers & Manufacturers Association (Northern) says.
"Not satisfied with their boost to tax paid profit of $49.9 million for 2001, up 26 per cent to reach $244.1 million, the Government's three power companies are putting the price of power up another 50 per cent this year," said Bruce Goldsworthy, EMA's Manager of Manufacturing Services.

"We are getting a flood of businesses advising us their power prices are going up by around this figure. Increases of this magnitude are unacceptable.

"Government's three major power companies - Meridian, Mighty River and Genesis - averaged a return on equity 46 per cent greater than they budgeted last year. Contact is coat tailing on their market price rises.

"Their increasing returns represent an unscrupulous, short term and unsustainable tax grab by Government.

"They are also unsustainable because the businesses affected will cut power use by limiting production and jobs, or worse, move production offshore.

"Government is expecting New Zealand businesses to start observing environmental and socially sustainable criteria but its own SOE businesses are plainly the worst offenders as their actions are both unsustainable to themselves as well as threatening to others.

"Government must address the situation urgently, to ensure security of supply is maintained this winter at prices that permit our industries to remain competitive."

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