PUBLIC OWNERSHIP OF ENERGY IS THE ONLY ANSWER

 

The solution to New Zealand's energy woes is to re-nationalise the energy industry. So why are none of our politicians advocating it?
 

ALTHOUGH IT hasn't been described as such in the corporate media, this week we saw a foreign capitalist going out on strike. The Winstone pulp and paper mills, a subsidiary of the Malaysian-owned Oregon Group, has closed its two pulp and paper mills, shutting the gates to some three hundred workers. It is threatening to close the mills permanently, with its chief executive claiming that the high cost of electricity has made the two mills unsustainable as a going concern.

If the strike by the Winstone owners has been designed to provoke a reaction from the Government, it did just that. Regional Development Minister Shane Jones loudly proclaimed that the price of electricity needed to be lower and even threatened regulation. Since such a proposal would never get through cabinet, Jones was grandstanding again. But it is interesting to observe how Jones, a champion of the 'free market', suddenly thinks that the state should come to the rescue of local capitalism.

Its a pity that Shane Jones has not been quite as vocal about the plight of ordinary New Zealanders, faced with ever-increasing power bills.  According to Consumer NZ, approximately 40,000 New Zealanders are disconnected for non-payment every year. Meanwhile, the main players in the power business are making huge profits.

Wading into the argument has been Energy and Transport Minister Simeon Brown. In an obvious attempt to cut Jones off in mid-rant, he has blamed the previous Labour Government for banning new exploration offshore for gas that could have averted an energy crisis. While this argument might be cheerfully peddled by Government supporters like Newstalk ZB's Mike Hosking and Heather du Plessis Allan, the argument doesn't stack up. As commentator Bernard Hickey has pointed out, during Labour's time in office 'there was $2 billion spent on offshore and onshore exploration using existing permits that didn’t increase gas supplies.'

As Hickey also points out, the real reason for the energy 'shortage' and skyrocketing cost of power is the failure of the energy industry to invest in renewables, in favour of paying out large dividends to its shareholders.  And as the New Zealand Government Ministry of Business, Innovation and Employment (MBIE) has reported, there is no need for new fossil fuels to keep the wheels turning. Wind and solar are the cheapest sources of new electricity generation.

The justification for the privatisation of the energy industry was that it would introduce competition, encourage investment and lower consumer prices. None of that's happened. Instead, we have an energy industry that is routinely accused of price gouging while making huge profits and issuing big dividends to its shareholders. This has been the case under both National and Labour governments.

The only solution is to show private interests the door. The electricity industry should be re-nationalised, and bills reduced. The free market, quite simply, is incapable of providing the affordable power that New Zealanders need. The profits that are generated from the re-nationalised infrastructure can be invested in the green economy rather than given to shareholders in the form of dividends. It would a major step forward in fighting climate change.

It is unacceptable that an energy industry has been allowed to develop whose main purpose is to line the pockets of shareholders while, at the same time, not investing properly in renewable energy.

Unfortunately, there is no political will among our present set of parliamentary parties to take up the cause of re-nationalisation. Although Green Party co-leader Chloe Swarbrick has talked of the need for fundamental economic change, the Green Party says it would 'fundamentally reform the electricity market structure.'  This is little more than tinkering with a broken energy model and it's nonsensical for the Green Party to say that it wants to create a market that can be made 'to work in the public interest'. The Green Party should be putting public ownership front and centre of its energy policy, not peddling illusions about a socially responsible free market. That's the old thinking of former co-leader James Shaw.

It's worth noting the UK Green Party says that the only way to reduce power bills in Britain is to permanently nationalise the power companies.

Co-leader Carla Denyer (who was elected to Parliament in the recent UK election) has commented: 'By bringing the energy retail companies into public ownership, setting the price of energy at an affordable rate and absorbing the global price rises, the government could make sure everybody can afford to get through this cost of living crisis. At the same time, it will mean this public service will be able to be run in the public interest, instead of in the interest of profit-making.'

Why isn't the New Zealand Green Party saying something similar?