Superprofits versus Supersocialism

Both ‘Superprofits’ and ‘Supersocialism’ are exaggerated terms, but the power debate – as much about ruling the country as about about electricity – has become a highly charged superdebate.

There is more at stake than whether we will get a few dollars off our power bills. It may be critical in deciding who runs the next government, and is in part an ideological battle between capitalism and socialism.

The stakes were raised yesterday when business groups issued a critical letter – PDF of letter – and NZ Herald reports in Power plan an ‘ambush’:

Ten business groups led by Business NZ yesterday issued an open letter to Labour and the Greens criticising the policy – which the two political parties argue may reduce power prices for industrial and commercial users – and have asked them to withdraw it.

The business groups said they were “particularly” concerned the policies would have a “chilling effect on investment across the entire economy”.

David Farrar and co. comment at Kiwiblog: Major Electricity Consumers ask Labour and Greens to drop their nationalisation policy.

Labour’s ‘Eddie’ at The Standard hasn’t addressed the letter directly but continues his campaign of trying to discredit critics in Why First NZ Capital wants you to keep paying too much for power and Why Brian Gaynor wants you to keep paying too much for power, with modest levels of discussion.

UPDATE: ‘Eddie’ has address this now in on Why Phil O’Reilly wants you to keep paying too much for power.

Labour MPs are distracted by Parekura Horomia’s tangi so have been quiet, although David Parker commented:

He said the letter “repeats the National Government’s scaremongering about investment”.

“The NZX stock exchange is up since the announcement. There is no investor flight or fear. It is irrational and damaging to markets and the New Zealand economy to claim there is.”

Parker was reported as saying he knew more about markets than Phil O’Reilly of BusinessNZ, and put out a media release attacking O’Reilly:

Phil O’Reilly open letter wrong on many counts – Parker

“The letter from Mr O’Reilly does not cure the current problems in the uncompetitive electricity market. Prices have increased since the independent report from Professor Wolack found $4.3 billion of overcharging. The system must be fixed.

“Currently super-profits are made on the back of our public resource – free water. This must be addressed if power bills are to be lowered. Mr O’Reilly again offers no effective solution.

“There are several other mistakes in the letter. There are no subsidies involved. It is remedying overcharging and will increase retail competition, and enable new entrants into generation.

Mr O’Reilly has made no effort to contact Labour to discuss this policy. If he had some of his errors would have been avoided,” says David Parker.

That’s ironic considering Parker’s policy was released without any effort to discuss it with business groups.

And according to Whale Oil Labour corrected Parker’s original release:

How embarrassing

Correction: at Labour’s request this replaces the earlier press release on this matter.

As for the Greens, Russel Norman is still overseas on leave, and Clint seems to have muzzled Gareth Hughes, but Clint himself fought back yesterday:

Clint Smith@ClintVSmith 

Biz NZ’s extraordinary attack on Green/Labour plan to lower power prices shows they know it’s popular & it’ll work, ending rentier profits

@georgedarroch it’s pretty telling, eh? They’re advocating for rentier companies’ ‘right’ to parasite off real NZ businesses and families

Familiar parrot lines.  Clint later tries to talk down a poll result (see Roy Morgan poll bounce)…

Clint Smith@ClintVSmith 

latest Roy Morgan. did 1/17 NZers switch left to right in last fortnight or just normal statistical variation w Nat trend down?

…but the swing against Greens and Labour should worry him. But the business letter didn’t seem to worry Metiria Turei in Greens respond to Business New Zealand open letter:

The Green Party will not be withdrawing its popular plan to reduce power prices for Kiwi families and businesses, Green Party Co-leader Metiria Turei said today.

“The NZ Power plan proposed by the Greens and Labour will lower power prices for Kiwi families and businesses. That will mean warmer homes, a healthier population, and more jobs. We are declining Business New Zealand’s request that we withdraw this popular plan,” said Mrs Turei.

“The Greens make no apologies for wanting to get power prices down to a fair level. Business New Zealand and National seem to think that electricity companies’ profits matter more than lower power bills for families and businesses.

Turei continued with familiar talking points, and concluded:

“The Greens are a democratic party and we won’t have our policy choices dictated to us by big business. We will make our policy choices based on what is best for New Zealand, its people, its economy, and its environment. NZ Power fits the bill,” said Mrs Turei.

The claim “based on what is best for New Zealand” is obviously just a Green view, they often seem to think their own convictions are uncontestable. But there are many opinions about what might be best for the country.

I also saw comments on Twitter suggesting that as National wouldn’t discuss with Greenpeace so why should Greens discuss with business groups.

I think when it comes to the election crunch voters will be thinking more about economic and business issues in New Zealand than they will worry about whaling in remote oceans.

The power debate will continue, largely between capitalists – National and business interests – versus what is seen as Labour backing more socialist Green policies.

A super heated battle between Superprofits and Supersocialism.

Leave a comment


  1. Goldie

     /  3rd May 2013

    I find it depressing that Greens/Labour keep repeating this lie about the generation companies making “super-profits”. Any fool can look at the generation company annual reports and see that is obviously not the case – in fact with Meridian returning a $76 million profit on more than $8.7 billion assets, more worrying for the taxpayer (as the shareholders)is why the generation companies have such poor profitability.
    Why the media let Greens/Labour get away with this obvious lie puzzles me.


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