Standing Orders — Sessional

I move, That Meridian Energy Limited be a public organisation for the purposes of the Standing Orders. As a result of Meridian Energy ceasing to be a State-owned enterprise and becoming a mixed-ownership model company, it is no longer subject to ongoing financial reviews by a select committee. To make Meridian Energy continue to be the subject of financial reviews, it is necessary to use this process of tabling a motion in the House to deem Meridian Energy to be a public organisation under the Standing Orders. This means that when Meridian Energy’s annual report is tabled in the House, it is then referred to a select committee for financial review. Mighty River Power was deemed to be a public organisation in the same way following its initial public offering, and Air New Zealand goes through a similar process. We intend to recommend that Genesis Energy is treated in the same way following its initial public offering. This process is repeated for the non - State-owned enterprise companies at the start of each parliamentary term, but they can all be done together, of course, once Genesis Energy is floated. The reason they are being done one at a time at the moment is simply the interaction of the cycle of the select committee hearings with the State-owned enterprise floats.

Of course, the Meridian Energy Ltd that comes before the select committee will be a different sort of company because it will now be subject to the scrutiny of the private market—that is, the sharemarket, shareholders, analysts, overseas experts, and so on. I am sure that the select committee will find that when Meridian Energy Ltd turns up, it will be a higher-performing company than it ever has been through its life as a company going back to the early 2000s, when it was first created. Of course, it is very important that it is well monitored because Meridian Energy is facing the same challenge as the other listed energy companies are, and that is an increasingly competitive electricity market. If there is one thing that Governments ought to have learnt, it is that a Government is not a good 100 percent owner of companies that are working to be profitable in a competitive market.

There was a time when it was relatively easy for Meridian Energy to do well, particularly under the previous Labour Government, when the market was not that competitive, the shareholder was not that demanding, and demand for electricity was growing consistently. However, that has all changed. Demand for electricity is now flat to falling, and that means that these companies are going to have to be considerably more competitive than they were. There is no doubt that a competitive market is a better way to get results for the consumer and to get pressure on electricity companies to deliver better results for the consumer. That is innovation in the delivery of energy, of which we will see an awful lot over the next 4 or 5 years; the lowest efficient prices that can be generated; and better, more sustainable returns to shareholders.

I want to give just one example of how a more competitive market has delivered for New Zealand energy consumers. Security of supply has become much less of an issue than it used to be. For instance, in the 8 years of the last Labour Government there were four dry year emergencies out of those 8 years—four dry year emergencies where we had high-level intervention by Ministers and we had campaigns for consumers to stop them using electricity. Under this Government and, more important, in a more competitive electricity market we have dealt with two extreme climate events very well. For instance, 2012 saw inflows into South Island hydro lakes that were the lowest recorded in the first 6 months of any year on record. That was then followed in 2013 by the worst drought in 70 years. These were two extreme weather events, and both were handled competently, effectively, and efficiently by a more competitive electricity market.

If there is one thing that would certainly not work, it would be to follow the Green Party’s NZ Power policy—the Green Party’s NZ Power policy. For instance, I was today asked a question about whether falling demand should be reflected in prices not falling. Well, the NZ Power policy guarantees that as demand falls, prices do not. It guarantees that because it guarantees a return to the owners of the generating assets. When the Labour Party members get up, they should explain that point. They should explain how the NZ Power proposal will handle falling demand. They should explain that. In the absence of a better explanation, here is what will happen. As demand falls, prices are guaranteed not to fall—guaranteed not to fall.

That comes on top of the other aspect of the NZ Power policy, which is the Greens’ emissions trading system policy, which Labour, in its efforts to try to distance itself from the Greens, never mentions now. But, actually, as part of the NZ Power policy, the emissions trading system policy of the Greens will add $500 a year to household electricity bills. It is designed to drive down demand. It will add $500 a year to power prices, but as demand falls, prices will not be able to fall. So that will be the worst of all possible worlds.

Meridian Energy will front up to a select committee once this motion is passed and it is deemed to be a public organisation. It will be a sharper, more commercial company and better at delivering lower prices to consumers. I invite members to consider what the future of Air New Zealand would have been had the previous Labour Government not floated some of it on the stock market.

The ASSISTANT SPEAKER (Lindsay Tisch): Order! This debate is about the status of Meridian Energy and whether or not it should be declared a public organisation for the purposes of the Standing Orders. It is not a general debate. Members must confine their comments to Meridian Energy and whether it should be declared a public organisation under the Standing Orders.

💬 Grant Robertson: I raise a point of order, Mr Speaker. I obviously understand that ruling, but I am also clear that in the earlier part of the finance Minister’s speech he spoke about the electricity market more broadly. I expect that members on this side of the House will be able to do that, as well.

The ASSISTANT SPEAKER (Lindsay Tisch): Order! Sure, sure. I am just making that clear now. The Minister has 2 minutes remaining to focus the last part of his speech specifically on what the Business Committee has allowed to happen. I am asking the Minister to continue.

💬 Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. It is just a simple question. Given that you have ruled in the twilight period of the Minister’s speech, are other members going to be given the same level of scope as the Minister had in his first 8 minutes?

The ASSISTANT SPEAKER (Lindsay Tisch): I am just making it very clear that although the Minister has said things that probably are outside the scope of the motion, by mentioning other things, I will allow a little bit of latitude, but I will not allow a 10-minute speech as a general debate on these matters. [Interruption] Order! The Business Committee has given permission for this debate to happen, and we will confine our comments specifically to the motion at hand.

I accept your ruling. The Government, of course, is proposing that Meridian Energy be deemed a public organisation because it still remains 51 percent owned by the Crown, with 85 percent owned by New Zealanders and 49 percent publicly floated. I support the motion.

Adhering to your ruling, Mr Assistant Speaker, I am going to confine my comments in the same way the Minister of Finance did. Labour will support this motion—

💬 Hon Bill English: Support the Government. Good on you.

No, no. Labour will support this motion not because we support in any way, shape, or form the asset sales but because we actually support this Parliament having a level of scrutiny over this entity. If this motion was not passed—and, by the way, this is another example of a stuff-up by that Minister and his Government, because the Clerk advised me that it would have been possible to bundle all of these motions and it could have been done after the original legislation was passed. They could have been bundled up so that we would not be sitting here doing this in an incremental, amateur-hour fashion. We want to examine Meridian Energy in a financial review. If this Minister had had his way, and if there had not been so much public outrage, he probably would not have put this motion up, because we cannot now access the Official Information Act in respect of this organisation. Our powers are rather limited, but at least we have the opportunity, by passing this motion, to examine this State-owned enterprise in respect of the financial reviews.

I said in part of my speech that this is another example of a Government stuff-up, because if you look at Meridian Energy, it is a complete mess. In fact, if we look at the whole mixed-ownership model, how it was kicked off, and how it was dealt with, we find that it was indeed a complete mess. The Minister talked about high-level Government intervention. Well, if ever there was an example of almost micro-management, it is from the Minister for State Owned Enterprises, who, complicit with the Minister of Finance, walked over in the dead of night without telling the board—and it confirmed that when it came and had a chat with us a couple of weeks ago—to do a nice little cosy deal with a company called Rio Tinto, which made $US3.7 billion in profits last year, I think. It was that Minister.

Meridian Energy, which is supposed to be independent, had advised the Government that it had reached the bottom line. It could not negotiate a deal. The Government swept in, threw in a $30 million sweetener, halved the notice period for Rio Tinto to pull the pin, and threw in a cheaper electricity price, all of which was paraded and wrapped up by the Minister of Finance as some sort of job guarantee protection scheme for the people of Southland. If that were true, it would be helpful to the people of Southland. Then we found out on Kathryn Ryan’s show—where we were both interviewed—when he was asked a really simple question about whether he asked for a jobs guarantee in return for all the little bits of—

💬 Hon David Parker: Corporate welfare.

—corporate welfare that he gave to Rio Tinto, that the answer was no. He did not even have the brains or the gumption, this Minister, to ask Rio Tinto for a jobs guarantee. I accept that it may have said no. I accept that. But there is an old adage around here that if you do not ask, you do not get. So because this Government had nailed itself to a must-sell time frame, Rio Tinto sat back, turned the screw, and when it reached the threshold of pain on this Government and this Minister was bent over a barrel, it just sprang the trap.

The problem is that next time—because, of course, Meridian Energy post-2017 can pull the pin—Meridian Energy will just rerun the scenario, except that the board will be in an even weaker situation because this Minister came over the top and put in the sweetener of corporate welfare. So the board will go in with very little moral authority and very little leverage, and Rio Tinto—as we know it will do—will spring the trap and say: “Well, we might have to pull the pin and get out of here.”, because of Bill English’s ineptitude and stupidity.

I have got to say that it was reported in the Southland Times that the week before the ink was dry on the cheque for 30 million bucks, Rio Tinto was already making machinists, I think they were, redundant. It was already into restructuring mode the week that Bill English signed the cheque, before the ink was dry. He had the audacity to come into the House and, in his answers to every question for oral answer, portray this deal as protecting Southland jobs. Well, we know that was totally untrue, because that Minister did not even have the brains or the gumption to ask for a jobs guarantee.

This is also the Minister who, along with his outgoing, retiring colleague Tony Ryall—you know how there is a tradition around here that when you leave they give you a silver tray; I think in his case it will be a silver candelabra. He will go down in history as the worst, most negligent Minister for State Owned Enterprises. He is the man who, in the Solid Energy deal, stood by and just let it all happen.

💬 Hon David Parker: Told them to borrow more.

He told it to borrow more. He told it he wanted more dividends. He ramped up its gearing to around 42 percent when mineral companies have about 0 to 10 percent gearing. Ms Pip Dunphy, the acting chair of Solid Energy, was asked by the Commerce Committee today whether, had Solid Energy had a gearing ratio that was similar to other international minerals companies—that is, 0 to 10 percent—that company would be in the dire straits that it is in today. The answer was no, we would not be. We would not be.

💬 Hon David Parker: What did Mr Palmer say, the previous chair?

Oh, well, of course Mr John Palmer was waxing eloquently and orbiting a stratosphere that a number of us have not been to, because he could not agree. They kept arguing about the price of coal, not arguing about how you manage the path of the price of coal. He also, of course—

The ASSISTANT SPEAKER (Lindsay Tisch): Meridian. It’s on Meridian.

Indeed, yes, I am getting to that. We are not up to 8 minutes yet, but I take your point. Mr Palmer, of course, confirmed that the Government had put pressure on Solid Energy to increase its borrowing ratios.

In respect of Meridian Energy, the two shareholding Ministers, Mr Ryall and Mr English, have presided over a complete debacle. These are the Ministers who said originally—in fact, it was the Prime Minister who said that the original figure for the mixed-ownership model sales would be around $10 billion. Then it went down to—

💬 Hon David Parker: And sold to mums and dads.

—and sold to mums and dads—about $8 billion, then it was $7 billion, then it was $5 billion to $7 billion. Now we know that the total amount, not including Genesis, which is the smallest of the lot, is around $3.93 billion. That is a great success, according to Bill English and Tony Ryall.

💬 Hon David Parker: And how many New Zealanders?

How many New Zealanders? Very, very few. Look at Mighty River Power—

💬 Hon David Parker: Less than 2 percent.

—less than 2 percent. Look at Mighty River Power, which gained just 113,000 so-called mums and dads. Then we find out that that, of course, includes companies and trusts. Then you had Meridian Energy, the one we are debating at the moment, where 63,000 mum and dad shareholders signed up—half as many as Mighty River Power—a short time later. Then, of course, less than 0.1 percent of the population signed up for Air New Zealand. This is widespread, mum and dad - like public ownership! Of course, those people who did sign up for Mighty River Power have taken a bath. Meridian Energy has basically flatlined. Air New Zealand—who knows where it will go? So I say to Mr English what gall the man has to stand up and somehow take credit, somehow say that this mixed-ownership model has worked.

💬 Hon Bill English: Very successful. Very successful.

He says it is very successful. I say this to Mr English: if his Prime Minister were still working for Merrill Lynch—

💬 Hon Bill English: Good value for taxpayers.

Oh, a good deal for taxpayers! Well, I say this: what planet is that member on? Normally when you sell something, you try to maximise the return for the owner. If John Key were still at Merrill Lynch, he would say to the owner—that is, the taxpayer—“You’re not going to maximise a return on these assets if you sell them now or, probably, in the future. Pull the pin.” The taxpayer could have got between $7 billion and $10 billion and then it was between $5 billion and $7 billion. The poor old taxpayers were washed up in a fire sale, with $3.93 billion plus a few dollars thrown in, and with Genesis Energy over the top. That is a disgrace, that is a fire sale, and that is selling most of it to your mates.

We know what happened under “Mad Max” Bradford. Contact Energy was predominantly Kiwi-owned. Then, of course, the share register changed, and now it is overwhelmingly foreign-owned. And we know what will happen to the dividends of Meridian Energy. Half of them will end up, of course, not in the public purse. One or two shekels might go to the odd mum and dad shareholder, and the rest will head overseas. That is really smart economics—really smart. It is ridiculous. It is a fire sale. And the reason—

💬 Hon Bill English: Very successful.

He says: “Very successful.” Well, he will take that to the grave. He will take that to his political grave all right. That will be on his headstone. That will be on his headstone. And mums and dads who used to own 100 percent of these shares and get the benefit of 100 percent of those dividends know he sold the family silver in a fire sale.

I am rising to speak on this Government motion No. 1 today because the National Government has insisted on privatising our State-owned energy companies, including selling 49 percent of Meridian Energy, at an extremely poor time to be selling electricity assets. John Key persisted with the asset sales despite the fact that they were very unpopular with New Zealanders, who voted 2:1 against the partial privatisation in a citizens initiated referendum last year. John Key has persisted in the asset sales, even though they do not make economic sense. Even the Dominion Post—not exactly known as a progressive publication—has described the asset sales as bordering on “economic vandalism”.

The asset sales, including the partial privatisation of Meridian Energy, have cost over half a billion dollars to date, once we include the partial sale of Genesis that the Government has announced. The Government’s excuse for the privatisation and sale of 49 percent of Meridian Energy was that it was going to help us pay down debt. We know that that is not true. Treasury’s own numbers show that the partial sale of our State-owned energy companies is actually costing us money. It is actually costing us quite a good deal of money—half a billion dollars. It is actually worsening the Crown’s fiscal position because the returns that these companies were earning were higher than the cost of borrowing. So it is not actually paying down debt. If anything, we have seen numbers that show that the fact that the Government has sold some of these highly productive assets is actually going to reduce its surplus in several years’ time.

We also know that the National Government actually created its own hole in the Budget by giving away tax cuts to the top 10 percent of income earners. These tax cuts to the top 10 percent of income earners are going to have cost us more by the election this year than we will have earned by selling off our productive energy companies. So the total revenue from the asset sales thus far is less than $4 billion, yet the tax cuts will have cost us more than $4 billion by the election this year. The National Government is quite keen to sign us up for new debt in the shape of sneaky public-private partnerships for motorways that have extremely poor business cases, like the Pūhoi to Warkworth motorway and Transmission Gully.

Why would the National Government go ahead with this partial privatisation—the sale of our productive, publicly owned energy companies, including 49 percent of Meridian Energy—if it does not make economic sense? The answer is that it benefits the Government’s mates and that there is a bit of political ideology going on here. Earlier today the Minister of Finance said that the Government simply was not a good 100 percent owner of State-owned energy companies. Well, clearly there is a little bit of that ideology against public ownership that is going on here with the National Party, but also it was really about its mates, the top 2 percent, who had piles of cash sitting around and were able to buy up these assets at a really good price. The taxpayer got a bit short-changed in the sale of Meridian Energy, but the top 2 percent of New Zealanders, who had thousands of dollars just sitting around to invest in energy companies, got a really good deal. Potentially, they will be earning those returns instead of New Zealand mums and dads—the taxpayers who would have been earning the returns on those companies if we had maintained public ownership.

The Green Party was proud to stand up against the privatisation of Meridian Energy. We are very proud to have brought the high cost of it to the attention of the public. Let me just enumerate the different costs in the sale of our State-owned energy companies, including Meridian Energy. There is the cost to Treasury and the energy companies themselves, the give-aways to share buyers, the forgone dividends that we will not be getting back in years to come, the losses on the sale, and, to top it all off, a payout to Rio Tinto. If you add all of that up together, we are at almost half a billion dollars. The direct sales of Genesis shares are likely to total a further $20 million, plus tens of millions for the bonus share give-away, and potentially much more.

That half a billion dollars could have been used for other things that would actually generate a return for New Zealanders. We could have employed literally hundreds or thousands of teachers and nurses, improving our health system and improving our education system. That is the type of investment that the Green Party would like to make in our country, not selling off public assets to benefit the top 2 percent; not selling off public assets and forgoing dividends for years to come and giving a subsidy to a private company, Rio Tinto, in order to keep the share prices of Meridian Energy a little bit higher, although it was still a bit of a fire sale.

The Green Party has put forward positive solutions to households’ high energy costs. One of those was Empowering New Zealand, which was a discussion document on electricity reform. We announced it at the same time that the Labour Party announced a similar inquiry into the possibility of electricity reform. It is colloquially known as NZ Power. Just to give one an example of how NZ Power would work, it is basically establishing a single buyer that will negotiate cheaper prices for all of us. We all know that despite the fact that electricity demand is flat, as the Minister of Finance has just said, prices for households have been going up, and Kiwis are paying $360 more for power per year since the National Government came to power. That is a sign that our electricity market is not working, and it is because it is dominated by the four big generator-retailers.

The partial sale and privatisation of the publicly owned generator-retailers is not going to reduce power prices for New Zealanders. If anything, it will do the opposite. As foreign private owners of those shares in those companies seek to maximise returns, there will be pressure on the companies to ratchet up power prices even more. So the partial privatisation has cost the taxpayer. It is going to end up costing households. The Green Party is here with a solution that will bring down power prices by ensuring we have a single buyer that can negotiate with these now privately owned power companies. Just as Tīwai Point has been able to directly negotiate cheap power prices with Meridian Energy for many years, NZ Power will act in the same way by negotiating on behalf of households.

We also, obviously, want to strengthen the role of energy efficiency and green energy within our electricity system. Meridian Energy for a long time has had a focus on renewables, but, arguably, it is the only big player that has, and that is just due to the fact that it is highly invested in hydro power. What we need is some mandate in the electricity market. We need someone with a mandate to focus on new renewable generation and where that is going to come from. The National Government is not on track to meet its own target of 90 percent renewable generation by 2025. It is very difficult to see how the partial privatisation, particularly the partial privatisation of Meridian Energy, is going to help in that respect. So the Green Party is proposing a smart idea that is not only going to bring down power prices for New Zealanders but also going to get a better deal for taxpayers and help increase the share of renewable generation.

Of course, the other smart idea that we announced recently was the Solar Homes package. That does not involve a direct subsidy to anyone, unlike the Government’s subsidy to Rio Tinto to prop up the price of Meridian Energy, but it does harness the Crown’s lower cost of borrowing and passes on those benefits to regular New Zealand households to help them purchase photovoltaic solar panels. That will help them be more independent and reduce their power prices. It will increase the total reliability of our network by having micro-generation spread across a wider number of households and the total amount of renewable electricity that is being used here in New Zealand. The Green Party cares about New Zealand families and households, and we care about the long-term future of this country. If we are going to deal with long-term challenges like climate change, we need to be investing now. We need those smart policies. Privatisation of Meridian Energy is taking us in the wrong direction. The Green Party wants to take us to a smarter, greener future.

The Labour Party will be supporting this motion because we want to have Meridian Energy scrutinised every year at select committee, so that we can highlight the differences in outcome from the policies that National is pursuing compared with those that would be secured for New Zealanders in a way that would reduce their annual household electricity bill by around $300 per annum. Mr English, at the start of this debate, asked us on this side of the House to explain how it works. In order to get an understanding of that, you have to have go back in history a bit and think about what has already happened.

Meridian Energy is the largest hydro-power producer in New Zealand. That hydro power is amongst the cheapest electricity to produce in the world. The cost of production of that electricity has not changed materially in the last couple of decades. It will not have gone up even by the overall cost of inflation. The cost of producing electricity has not changed very much, but the price that is paid for that hydroelectricity to Meridian Energy has gone up year after year after year because of the pricing model that is used. As the cost of new electricity from alternative sources like gas—which doubled in price—and alternatives to gas like geothermal and wind went up under the current pricing model, the price paid for hydro power has risen to the same level, essentially. So the price that is paid for hydro power has risen far, far above the cost that it takes to produce it.

This Government, the prior Labour Government, and the National Government before that went along with that while the extra profit that was being taken from that hydro power was going back to public purposes. The extra profit that has been taken as a consequence of the price in overall electricity prices does not come from a change in the hydro station; it has actually come from the free public fuel that flows through those hydro stations. We all went along with that when that was being recycled via the Government’s books into other things that the Government spends money on for taxpayers, like hip operations or educational services. But what the Government has done now is privatise that benefit through the sale of those assets to private shareholders, so instead of the public getting the benefit from the public rivers that are driving that electricity, it is actually private shareholders who are getting it. We say that that is unfair. We say, as a consequence, that we should not put up with this profiteering from our public rivers, which drive the hydro stations that Meridian Energy makes most of its money from.

So how do you fix it? Well, there are two ways you could fix it. You could price water. You could charge companies for the use of their water, and then you could recycle that money again through hip operations and education services for the benefit of New Zealanders. That was one option that we could have pursued. The reason we did not pursue that option was that that would have been characterised by the Government and by some of the industry participants as pushing up electricity prices, even though it would not have. It would have been characterised in that way, and, therefore, we would not have been able to achieve the benefit for New Zealanders that we want to, which is equivalent to $300 a year for an average consumer.

The alternative is to say that you will pay different sorts of electricity producers different amounts for their power. In respect of hydro power, which is so cheap to produce, you do not pay them the same amount as someone who is making wind power, geothermal power, or gas-fired power, or, indeed, hydro power from a newer hydro facility, because you effectively take as a proxy for the price of water a reduction in the amount that they are paid for their hydroelectricity. Is this practical?

Well, in September last year, in advance of Meridian Energy shares being offered, First NZ Capital put out a document called Meridian Energy Limited: Cash Flow Powerhouse. In it, First NZ Capital considered the prospects of Meridian Energy, including what would happen if the Labour proposal was imposed. It said this is how it could work. Bill English obviously has not read this. I am surprised that Treasury has not brought it to his attention, given that it is a publicly available document.

The document reads: “Step 1: Hydro generators are compelled by legislation to sign fixed sum annual contracts, in return for all their future hydro revenue.”—that is, they get paid their operating costs plus a fair return on their capital. That is the historic cost of those dams—not some artifice that is later calculated, but what those dams cost them when they bought them. They are paid a fair return on capital plus their operating costs, which is a far lower sum than they get under the current market model, which is privatising those extra amounts to others. “Hydro generators are compelled by legislation to sign fixed sum annual contracts, in return for all their future hydro revenue.” You have got to control when the water is released, and the document suggests that this would be “passed to the electricity System Operator (currently part of Transpower)”, and we agree that that is how it would work.

It continues: “Step 2: NZPower extracts swaption agreements from all the major thermal plant, to limit its exposure to spot purchase cost”. Then “NZPower interposes itself into the current settlement process” and the market continues to work. Indeed, the market would work better, in our view, because you would be able to separate retailers from the generators, and you would get more retail competition as well. In step 4, according to this report from First NZ Capital, “Financial impacts on gentailers would now be largely in place”, and these steps could be completed within 1 to 2 years. So within 1 to 2 years under a Labour Government you would have processes in place that would strip out all that extra money that is being robbed from New Zealanders from the value of our public rivers and given to the 1 or 2 percent of New Zealanders who have purchased shares in those electricity companies. That money instead would flow through to lower electricity prices. The average New Zealand residential consumer would save $300 a year—around that amount—and commercial users and others would save around 5 percent on their bills.

This is what would happen if you had a decent Government stopping the privatisation, effectively, of our rivers, because that is what has happened. The Government is privatising the value of those rivers for the private shareholders of the likes of Meridian Energy to the detriment of everyone else—the 98 percent who do not get that private benefit from our rivers. This would reverse that. It would also increase competition in the market by separating retailers from generators. We would have greater competition in retail and we would have more transparency with people bringing on more generation. They would be less reliant on physical hedges if they were retailers, and if they were people who just wanted to generate, they could sell that into a proper market without having to be a giant generator-retailer themselves.

You would get more small generators entering on the generation side, you would get more competition at retail, and you would have more competitive pressure on prices. You would have better demand management, because those people could bid in. Instead of increases in capacity, you could have someone aggregating efficiency or taking the peak off demand, which is expensive to cater for. That might be someone like Vector in Auckland aggregating photovoltaics in the future, in a cost-effective manner, so you could take the peaks off demand. You would have increased competition at retail, and you would have increased competition for people wishing to supply new generation, because they would not need to be a generator-retailer either. You would find that some people who are willing to invest in that sort of thing would probably accept a lower rate of return than the generators that are involved in the current, less competitive market.

As I have said, the super-profits that have been taken off our rivers would be stripped out of the system and fed into the market in a way that would reduce prices. Rather than this being an abolition of all markets, it is actually not; it is just changing the way in which they are structured. It would be fairer to New Zealanders, who live in a country where we have amongst the lowest electricity production costs in the world, with 60 percent of our electricity being probably the lowest-cost electricity in the world, like other hydro-rich areas. Those benefits would flow through to consumers.

We have plenty of disadvantages in New Zealand. We are distant from large markets, with the risks of exports and exchange rate fluctuations being faced earlier by our businesses than in countries with larger economies. Those other economies do not face the transport costs that we have for long distance exports. For goodness sake! At least our businesses could have the advantage of our natural bounty, which is low-cost electricity, rather than concentrating that benefit in the hands of the 2 percent of people who purchased shares in the likes of Meridian Energy.

Kia ora, Mr Assistant Speaker. Every now and then it is worth stating the obvious. I think I am probably repeating the obvious, but let us be clear. This motion is necessary only because Meridian Energy Ltd has been partially sold by the National Government. Let us be 100 percent clear: that is why the motion is needed. It is our view that the sale of Meridian Energy Ltd was completely contrary to New Zealand’s national interest.

This motion merely cements in the fact that a National Government has been a complete and utter disaster for the New Zealand electricity system. The National Government took a functional and essentially sound system run by a Government department, and destroyed it. Starting with Max Bradford’s theory-driven, ideologically based, so-called reforms, it has foisted a total dog’s breakfast on the New Zealand public, and this motion shows that it has learnt nothing. This madness—the folly that keeps on taking—continues. After over 5 years in Government, National has brought absolutely zero improvement to this sector.

The Minister of Finance’s opening speech merely reinforced that this National Government is still addicted to the market, however much a fantasy that is, especially in the electricity generation and distribution sector. Through the sale that necessitated this motion, what do we actually have to thank this National Government for? Firstly, for high electricity prices for New Zealanders despite, as Mr Parker just said, New Zealand as a nation having a great advantage in renewable energy sources, notably in hydro power. It is a huge comparative advantage that has been squandered. We now have a system that is good only for generating higher prices for the long-suffering consumer. We now have a system of mind-numbing, bewildering complexity, under which any sort of price hike can be rationalised and justified. Thanks to a National Government, the electricity sector is now so bewildering, so arcane, and so impenetrable that it needs an army of consultants and business.

Thanks to a National Government, we have a proliferation of organisations in this sector. We have an explosion of management and chief executive officers, all generating immense costs in justifying their existence. Recently we had the absurd spectacle of the Electricity Authority trying to tell us that night was actually day. It claimed that a study of power charges over the last 30 years shows that “consumers in the past were hugely under-charged for their electricity.” This breathtaking claim was, of course, immediately exposed for the nonsense that it was by objective and independent commentators, but this is typical of the Orwellian double-speak that now characterises the official party line on the electricity sector. Many a National Party spin doctor would be proud of the audacity of the Electricity Authority’s ability to rewrite history. With the $230,000 that Dr Brent Layton receives as chairperson of the board of Meridian Energy, and the $270,000 that the chief executive officer, Carl Hansen, receive—along with a possible performance bonus of an additional $48,000—the New Zealand public are quite right to ask what actual value the Electricity Authority provides.

But, of course, no National Minister has any interest in the real truth, and the truth is that over the past decade electricity prices have risen at twice the rate of inflation. National’s asset sales programme, including the partial sale of Meridian Energy, has been an act of economic sabotage. It is nothing less than an economic crime. It is no exaggeration to say that the sale of public energy assets like Meridian Energy has been an exercise in robbing the people of New Zealand to favour a few.

We pick up the point that Mr Parker made around water. When I was recently in the Republic of China, a local Minister asked me: “How will you defend your water when the water crisis comes?”. We do not need an army to try to come and take our water. The National Government has started selling our access to it through partial privatisation of our rivers and through the partial privatisation of our power companies.

Electricity supply is fundamental to society and the economy. It is the basis of our standard of living. Yet instead of creating electricity policy on the basis of the common good and on the basis of the national interest, the National Government has used it to loot the public.

This motion is a meaningless procedural gesture. It is an insult to the public. After all the damage this National Government has done to an essential part of New Zealand’s infrastructure, New Zealand First will strongly oppose this motion.

This motion would be opposed by the Labour Party but the inevitable has happened now that these State-owned enterprises have been sold off. The State-owned enterprises have been sold off, and what has happened? Our electricity prices have started to go up at a rate that is extraordinary. I have just received power bills from people who have told me that their Meridian Energy power price has gone up by 15 percent—15 percent their bill has gone up by. This is what a person said to me when they wrote in: “Attached is the advice I received from Meridian Energy telling me to expect a 15 percent increase in my electricity bill at a property I own.”—a 15 percent increase—“Meridian Energy blames the lines companies for this increase.” Are you telling me that the lines companies have put his bill up by 15 percent? I do not believe that. I do not believe that, and all over the country right now people are receiving bills with 10, 11, 12, 13, 14, and 15 percent increases.

This is what the person went on to say. He said he had tried to get in contact with Meridian Energy—rung it up, written to it—and still does not have an adequate explanation of why that power price has gone through the roof. He said to me: “It is, of course, impossible to work out from a typical power bill who is taking what cut as amongst the retailer, the lines company, or Transpower. Obfuscation seems to be the standard practice in the power industry. We don’t know what is going on, because it suits the power industry to make sure that it stays that way.”

This is in a country where John Key said that power price increases and the power price at the moment were OK. Simon Bridges, our Minister of Energy and Resources, said that, actually, power was not too expensive. For most New Zealanders, they have seen power prices increase in the last year by four times the rate of inflation—four times the rate of inflation. So while inflation has been going up at 1 percent, the power prices have been going up at a rate of at least 4 percent. That is wrong. That is wrong because we know right now that the electricity market at the moment, into which the Government has sold Meridian Energy, is oversupplied and has been oversupplied for the last 5 or 6 years, that it will continue to be oversupplied for electricity probably for the next 5 to 10 years, and that the demand has actually gone down. Free-market principles would tell you that in that sort of situation, prices come down. The Government says the market is working efficiently. Adam Smith, of course, would be very interested in this, because apparently it does a different thing to what he actually proposed back in the 18th century. Prices are going up, despite the market being oversupplied, and demand is going down. That is absolutely wrong.

A number of companies are making a lot of money out there. One of those companies is the company we are talking about at the moment, which has just been sold off. Its new private shareholders are not mums and dads. They are not mums and dads; they are the corporates. They are the 2 percent of the population that can afford to buy shares. They are the overseas companies that have bought into our industry so that the profits can be shipped off offshore and our current account deficit can get ever-steadily worse. Those companies are going to be demanding more profit. That is why people like the person whom I have spoken to and who has written to me says that his power bill is going up by about 15 percent.

That is why we oppose asset sales, that is why we oppose electricity price increases, and that is why we support this motion. This is a cynical Government, which took hold of Transpower. The person who sent me this Meridian Energy power bill is asking the question that is on everybody’s lips. If anybody is watching this right now and wants to send me their power bill, please send it to me with the story of the power increases in your household. I would be happy to read those out, talk about those, and take those to the Government. This person does not know what part of his bill is what. It is just a big blur. Well, let us take the power increase in Wellington alone, which is 7 percent if you are with Contact Energy. If you are with Contact Energy, it is 7 percent. Of that, 4 percent is supposed to come from the lines companies.

The lines company in the Wellington area says, well, actually, 2 percent was passed on by Transpower. What is the story with Transpower? Transpower used to have a generator dividend, a profit, and that dividend was spent by the previous Government on upgrading our electricity grid. This Government—no, no, no—says: “No, you give this Government the dividend because we need it to balance our books. You charge the consumers for the upgrade of the grid.” That is exactly what has happened. If you are wondering why your power bill is going up and why your Transpower prices are going up, that is the reason. Two percent of that electricity price increase in the Wellington area is Transpower. Two percent is the lines company increases. Who knows where the other 3 percent came from? We have no idea because the power bills at the moment will not spell that out.

The Electricity Authority, created in 2010, 4 years ago, finally woke up to the fact that there might be a problem with the electricity prices in New Zealand—finally woke up. Mr Brent Layton, who is the chair of the Electricity Authority, after passing on a lot of information to the Minister of Energy and Resources to help him with combating our New Zealand power policy, said he probably would not work under a Labour Government. Well, that is fine. He has finally come to the realisation that the authority is going to have to look at this particular issue.

Yesterday I drafted a member’s bill to go into the ballot so that in our power bills, the charges will be unbundled. We will have the generation charge, the wholesale charge, the Transpower charge, the retail charge, the lines company charge, and so on. Each of those will be separated out because we cannot have the situation we have at the moment, where it is a complete blame game between all of those various parts of the electricity sector. Two hours after I put out my press release, the Electricity Authority put out its press release and said it was going to look at the “blame game”—it used the same language. It is going to look at the blame game and it is going to try to distinguish between the various components of the electricity market. It needs to do that because, like this Government, it has looked the other way and relied on a market that is clearly broken while power prices have continued to go up. Meridian Energy’s power prices have gone up, Mighty River Power’s prices have gone up, and Contact Energy’s power prices have gone up. They are all blaming each other and blaming the lines companies, but I can tell you one thing about one lines company called Vector, which dropped its prices by 8.4 percent—at the instruction of the Commerce Commission, I might add, but nevertheless it dropped it by 8.4 percent—and guess how much of that 8.4 percent flowed through to the customer? Zero percent. The power companies pocketed that saving instead of passing it on. They pocketed that saving to increase their profits.

This legislation, where we have split off these power companies, will add to the power prices of New Zealanders. They will hit those people who can least afford to pay. We will see more disconnections. There were a record number of disconnections, more than at any time in the past, in the third quarter of last year. More people than at any time in the past had their power disconnected, and that is just because of this Government.

Members, this debate has concluded. The question is that the motion be agreed to. Those of that opinion will say Aye, to the contrary, No. The Ayes have it.

I raise a point of order, Mr Speaker. I am terribly sorry. I missed the counting. You went so fast. We wanted to vote on that motion.

I have already declared the result that the motion was passed. Members must be observant and listen to the proceedings of the House. I cannot allow it. I have already put the vote. No one opposed it. No one asked for a party vote, and so my ruling stands.

I totally accept the fact that perhaps I was not alert at the time when you were calling for the voting and I apologise for that. However, with your guidance can I please seek leave of the House to reconsider giving the opportunity for New Zealand First to put forward its vote?

I am just seeking some advice on this matter. The member can seek leave to have her party’s vote recorded. Leave is sought for that purpose. Is there any objection? There is no objection.