Even if it does go ahead, I won’t be buying shares in the government’s non-privatisation1 of electricity generators.
Well, in the first instance, David Shearer and Russel Norman have demonstrated that what can be created with politics can also be killed with it. Says Oliver Hartwich,
Practically from one second to the next, and with no previous warning, let alone any kind of meaningful stakeholder consultation, the rules of the energy market were called into question… The strong public reactions to the proposal, as well as the substantial losses for energy companies listed on the NZX, show what a bombshell of an announcement it was.
So desperate are these two political hyenas to mark out their territory, they don’t care whom they hurt. Because what Norman proposes (to which Shearer agrees) is a single state buyer along the lines of the single-buyer model NZers endured in the 1970s, back when we enjoyed rationing, blackouts and (as this report shows on page 19)3 prices increasing 58% in the period from 1975 to 1979.
On the other hand, though, what does National’s plan consist of—even if it hadn’t already been disrupted?
Well, given that it’s neither freeing up the non-market for electricity2 nor privatising the generators,1 all it’s proposing is selling shares in what will remain state-owned companies.
Or, to put it another way, it’[s offering you the chance to buy into a government department with the power of coercive monopoly—with all that implies.
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1. Selling less than a majority means they will remain state-owned. Only in Russel Norman’s dictionary is this privatisation.
2. What Max Backward set up in the nineties was not an open market in electricity—it was a closed market in which entry was, and still is, restricted to those who’d acquired government favour. “Electricity in New Zealand has NOT
been deregulated, and it sure hasn’t been privatised. Bits of it have been, but most has been effectively nationalised. To understand this, one needs to trace the history of electricity reform in the past twenty-five years.”[Read ‘Power for the People’ on page 38 of the July 2006 Free Radical magazine]
3. Hat tip Kiwiblog.