Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Caritas opposes partial privatisation of power companies

27 April 2012

Turning a collective good into a private benefit: Caritas opposes partial privatisation of state power companies

Caritas Director Julianne Hickey spoke to the Finance and Expenditure Select Committee this week about the Mixed Ownership Model Bill. If passed, this Bill will allow the partial sale of the four state owned power companies. Caritas told the Committee that the legislation will lead to greater inequalities and, in the current regulatory environment, may not lead to sufficient protection for poor and vulnerable consumers.

The full text of the oral submission follows:

Caritas has reflected on the question of the partial privatization of State owned power companies in the light of Catholic social teaching on the common good, the protection of the poor and vulnerable members of society, the protection of the environment, and the principle of the universal destination of created goods.

Catholic social teaching contains cautions both for people seeking to privatise and people seeking to nationalise industries and services which provide essential goods. It recognises both the value of the market and the limits to the market.

We have drawn on experience by New Zealand Catholic groups with low-income power consumers who have had difficulty even under current arrangements with obtaining or maintaining power accounts. We also have recent experience of the privatisation of state assets, where private owners failed to invest in basic maintenance, forcing the government to buy them back rather than allow services to fail. We have also considered the urgency of the environmental challenges facing us, and question whether the Mixed Ownership Model provides the best incentives and encouragement for power companies and consumers to make changes in their energy production and use.

A significant lens through which a Catholic viewpoint considers this and any public policy proposal is how it will impact on the poorest members of society. Will it increase or reduce inequalities in our society. Despite the promises that shares will be available to ‘mum and dad’ investors, the reality is that only the wealthier members of society are going to be in a position to buy shares. People who are currently struggling to pay their power bills, not to mention accommodation, food and transport costs, do not have spare change for buying these shares. Privatisation of state assets turns a collective good into a private benefit, and this increases the gap between the rich and the poor – those who have more, obtain even more, while those who have less, own even less.

We have real concerns about the lack of protection for consumers. The Regulatory Impact Statement for this Bill says the Government needs to be satisfied that regulations adequately protect consumers. This is insufficient. The Government has a responsibility to ensure that consumers are adequately protected. This means protection now and in the future; both in terms of certainty of supply and for long-term sustainable infrastructure. It means ensuring fair price setting; it means ensuring that people have the right to warmth and light.

Compared to the United Kingdom, where the Office of Gas and Electricity Markets, or Ofgem as it is called, has a central role in oversight and protection of consumers, the New Zealand Electricity Authority has a much narrower role. For example, consumer protection issues in the electricity industry which were previously carried out by the Electricity Commission have now been delegated to Consumer Affairs. This has a much smaller role in considering the best interests of power consumers than an electricity regulator with the oversight of the end-to-end market with clear authority and the ability to safeguard consumers. For example, Mrs 74-year-old-pensioner may be able to approach the current Electricity complaints ombudsman with a complaint concerning a specific transaction, but is unable to ask them to consider whether the price charged for power is fair and reasonable. The UK equivalent can and does look at such matters.

New Zealand has very fragmented oversight of the behaviour and responsibilities of power companies, with different functions shared between a number of government departments and agencies. There is no overarching policy and body that ensures good economic, social and environmental outcomes. In the United Kingdom, Ofgem has specific responsibility for people who suffer from fuel-poverty. Where is that discussion in this debate? In the United Kingdom, Ofgem oversees power supply to vulnerable consumer groups, such as low-income people and rural residents. Who will have that oversight here?

Caritas believes there may be greater inequality as a result of this legislation. Without greater clarity about regulatory oversight, Caritas does not favour the partial privatisation of the four State owned power companies. Our Catholic tradition recognises both state ownership and the right to private property. However, what we must take into account in assessing this legislation is how our arrangements affect the common good, which is the good of all of us, what we all need to live a truly human life as members of a human family. New Zealand does not have the regulatory environment to ensure the protection of the most vulnerable today and in the future, so partial privatisation may not help us to achieve the common good.

Both the written and oral submissions by Caritas to the Select Committee is available here.

Caritas Aotearoa New Zealand is a member of Caritas Internationalis, a confederation of 165 Catholic aid, development and social justice agencies active in over 200 countries and territories.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

PARLIAMENT TODAY:

  • Week in Parliament 22-05-15
  • Saturday Sitting
  • House Rises At Midnight
  • Telco Levy Bill Passes
  • Telco Levy Bill Completes First Reading
  • Social Housing Bill Passes Under Urgency

  • TPPA: University Of Auckland Warns Of Negative TPP Impact

    The University of Auckland May 20, 2015 University of Auckland Warns of Negative TPP Impact With the Trans Pacific Partnership (TPP) negotiation drawing to a close, the University of Auckland has expressed serious concerns about its potential implications. ... More>>

    NZ Flag: Flag Referendum Gets Hit Hard In New Poll

    The latest Campbell Live text poll confirms it is time for the Prime Minister to listen to the public and shelve his flag referendum, says the New Zealand First Leader Rt Hon Winston Peters. More>>

    Gordon Campbell: The Government’s Belated Moves On Property Speculation

    Is it a property tax on capital gains or a capital gains tax on property? The Jesuitical distinctions in the government’s spin about its latest moves on property speculators are all about whether the government can claim that it jumped, or confess that it ... More>>

    Grant Robertson:
    Key Can’t Just Be Prime Minister For Parnell

    John Key must show New Zealanders in next week’s Budget that he is more than the Prime Minister for Parnell, and is also the Prime Minister for Pine Hill, Putararu and Palmerston North, Labour’s Finance spokesperson Grant Robertson says. In a ... More>>

    Labour Party: More Regional Jobs Go In Corrections Reshape

    News that 194 Corrections staff are to lose their jobs will have ramifications not only for them and their families but for the wider community, Labour’s Corrections spokesperson Kelvin Davis says. Prison units at Waikeria, Tongariro and Rimutaka ... More>>

    ALSO:

  • NZ First - Prison Job Losses to Send Money Offshore
  • TPPA: ‘Team Obama’ Regroups On Fast Track, Still Not Deliverable

    ‘After yesterday’s stinging and unexpected defeat for the Obama administration’s attempt to advance Fast Track legislation in the US Senate, Senate leaders have worked up a compromise they think will get them past this blockage’, according to Auckland ... More>>

    NZ Government: 5,500 More Doctors And Nurses In Our Hospitals

    Health Minister Jonathan Coleman says a record number of doctors and nurses are working in District Health Boards across the country. More>>

    Controller and Auditor General: Katherine Rich Conflict of Interest Decision

    We are writing to you about a matter that has been raised with us by members of the public. More>>

    ALSO:


    Budget 2015: Andrew Little On The 2015 Budget

    Speaking to the Chamber of Commerce, the Labour opposition leader attacked the government’s approach to economic issues facing New Zealand. He said they have been “more than reckless in their complacency” and “the next week’s budget will do nothing ... More>>

    Defence Force: NZDF Building Partner Capacity Mission Personnel In Iraq

    NZDF Building Partner Capacity Mission Personnel in Iraq The New Zealand Defence Force Building Partner Capacity training mission contingent is in place at Taji Military Complex in Iraq. The Chief of Defence Force Lieutenant General Tim Keating says the ... More>>

    PM Press Conference: ACC Levy Cuts Announced

    In a press conference this afternoon in Wellington, ACC Minister Nikki Kaye proposed $500 million worth of ACC levy cuts. More>>

    Quakes: New Process For Red Zone Crown Offers

    Canterbury Earthquake Recovery Minister Gerry Brownlee has announced a process to give everyone a say on the Crown offers to owners of vacant, commercial/industrial and uninsured properties in the Residential Red Zone. More>>

    ALSO:

    Gordon Campbell: On The Battle Obama Is Waging Over The TPP

    For the past two and a half years, this column has been arguing that the fate of the Trans Pacific Partnership (TPP) deal will hinge on whether US President Barack Obama can win Trade Promotion Authority (TPA) from Congress... Last week, the White House finally, finally unveiled a draft TPA Bill. More>>

    ALSO:


    Gordon Campbell: On lessons for Labour from the UK election
    If the polls were right – and the pollsters kept telling us how accurate they’d been in 2010, and even Nate Silver was getting the same results – there seemed no way that the British Labour Party could lose last Thursday’s British election. With Labour predicted to win around 270 seats and the Scottish National Party batting around 55-60 seats, Labour seemed to be home free. But…as we now know, things didn’t turn out that way. Labour ended up with 232 seats and the Conservatives swept back to power with an outright majority, after winning only a little more than a third ( 36.9%) of the votes cast.MORE >>
    Also.

  • NZ PM John Key - PM congratulates David Cameron after UK election
  • The Nation IV Transcript - Hack Attack author Nick Davies
  • Get More From Scoop

     

    LATEST HEADLINES

     
     
     
     
     
    More RSS  RSS
     
     
     
     
    Politics
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news