Power price facts

Parties opposed to the partial sale of a few state-owned energy companies keep raising the fear of price rises when power companies are partially privatised.

Prime Minister John Key was able to counter that with some facts during Question Time yesterday:

.. . Secondly, we would like to remind the Leader of the Opposition that under Labour, power prices went up 72 percent; under National they have gone up 14 percent. I also refer the member to the Powerswitch website, which shows a couple of things. Firstly, of the 21 companies that are listed, the 14 cheapest are actually privately held companies, and the 15th is a council-owned company. The advice I have had is that from May 2011 to April 2012, 422,256 customers have changed electricity retailers, which shows that under a National Government there has been a great desire to see choice and efficiency in the market.

No-one is promising a price reduction when energy companies are partially privatised.

But if 15 of the 21 power companies now operating which offer the cheapest prices aren’t SOEs, partial sales should benefit consumers.

2 Responses to Power price facts

  1. Neil says:

    Ele I have watched the debate on Parliament TV which related to asset sales. I know that the opposition will use all tactics to slow the bill down and try to whip up hysteria. Fair enough, that is the job of oppositions.
    What annoys me is the financial illiteracy of the Greens ,Labour and NZ First.
    The government still holds 51 % and will continue to do so. They will not sell their share, regardless of whether private investors sell or not.Any change would require a change to the Asset Act in parliament.

    The opposition rail on about overseas investors taking their dividends offshore. I own shares in overseas companies like Commonswealth Bank in Australia, BP in the UK and McDonalds in the USA. I get dividends from those companies in local currency and convert it to NZ currency.This is a two way situation.

    I happen to believe this debate will not help the National Party simply because of the financial illiteracy of ordinary New Zealanders. You get Winston Peters,New Zealands worst financy minister, stirring up his conspiracy theories. .
    As for the Greens ! Apologists for the far left socialists.

    A last comment. Thousands of NZ senior citizens lost their money in the finance company disaster. Our sharemarket is a ragged remnant of the 90’s with few blue chip shares. No investment is foolproof but the asset sales will present older citizens to invest in reputable companies.
    There is a lot of money out there in bank deposits earning virtually nothing in the way of interest. Grey Powers opposition to these sales is strange after what has happened to many of their members in the past five years.
    Many of these older people use these dividends to lift their standard of living.As well, many people in Kiwi Saver accounts will be invested in our local assets as well.

    Like

  2. Colin McIntyre says:

    Neil, good to see that you must have passed your Financial Advisor exams?
    Max Bradford, Tony Ryall, Bill Birch, and Put it on the Bill English assured us back in 1998 ( I could be corrected on the actual date) that they had solved all the problems associated with the generation, supply and pricing of electricity throughout New Zealand.
    IMHOP, New Zealanders are once again due to to be “shocked”.

    Like

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