David PARKER

Energy Spokesperson
6 September 2011

MEDIA STATEMENT

Asset sales of no benefit to electricity consumers

The National government confirmed in the House today that it has received $900 million in dividends and capital distributions from SOE electricity companies over the last year, including $520 million from Meridian following its sale of dams on the Waitaki to Genesis, Labour’s Energy spokesperson David Parker says

“Obviously up to half of future payments would go to the purchasers of shares in the future if half the SOEs are sold.

“At a time when our electricity SOEs are returning major benefits to every New Zealander, it just makes no sense at all to be selling off shares in them.

“Today’s answers in the House must surely leave taxpayers pondering the motive behind the Government’s plan and where it will leave them in the future,” David Parker said.

“An important part of the assessment will surely be the effect on electricity prices. The Meridian sale to Genesis was required by the Government in an attempt to improve competition in the uncompetitive electricity market.

“If shares in Meridian were privately owned, the Government would be unable to do that. The Minister, in question time today, refused to acknowledge this obvious point.

“Clearly then the steps that a future Government could take in the face of inadequate competition in the electricity market are narrowed once shares in the SOEs are sold.

“In our view, Grey Power is correct to be concerned that following privatisation of shares the SOE electricity prices are likely to rise to the higher levels now being charged by non-SOE players.

“The sale of shares will reduce political accountability for SOE power prices. It will also increase the incentive on the partly privatised companies to maximise shareholder returns through price maximisation. Grey Power is right to expect that power prices will rise further,” David Parker said.

ENDS

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