Grey Power Federation Press Release 2/04/2012

Who Wins And Who Loses From The Sale Of Electricity Generators?

The asset sale debate is not about controlling debt, or the government’s ability to fund schools and hospitals. It is about building fortunes for a few private interests.

Privatisation is being promoted by some political parties. But it is really business interests who are looking for ever-greater financial gain. Since the 1980s they have confused voters and politicians alike with their Rogernomics rhetoric.

Electricity is a license to print money. Price rises of essential services give a guaranteed income to electricity suppliers. That’s why electricity prices are strongly regulated everywhere in the world, except in New Zealand.

Restructuring was a total culture change, driven by Electricorp and the hand-picked directors of 60 elected power boards and municipal electricity departments.

Grey Power members were deeply involved in the campaign to save the local power companies from privatisation.

Public pressure all over the country won the day in most districts. Only 5 of over 60 local power boards were privatised in the first round, the rest became trusts or stayed in council ownership.

But mergers and takeovers snapped up many of the trust- and council-owned companies. This built fortunes for the formerly insignificant companies that first got their hands on the assets.

In 1991 Electricorp announced that prices would rise to make it commercially attractive to build new power stations. But only residential prices rose – big industries got ever-bigger discounts. The gap between residential and non-residential prices is still rising.

Privatising the SOEs would build even bigger fortunes in the business community than happened with the local power boards. Asset values would ratchet up, as happened with local power companies. Price rises will follow in order to maintain an “acceptable” rate of return to the privatised companies.

Grey Power absolutely opposes any further privatisation of New Zealand’s essential infrastructure assets.

Roy Reid
President
Grey Power National Internet Site: www.greypower.co.nz

ENDS

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