There are nuclear options available:
Cut the gentailers in half by force. Those pro-wrecking ball argue if you force them to separate out the generation side of the business from the retail, you’d create more competition and lower prices.
You could do a similar thing with the supermarkets. One idea is to force Foodstuffs and Woolworths to sell 120 supermarkets and a third of their six distribution centres to a third player. Hey presto. The duopoly’s dead. Long live Queen Nicola.
Now we’re still waiting to see what cat Willis will pull out of her shopping bag on this. She has advice and considering the options.
Here’s what I think she’ll do:
We can get clues from the way they’re handling electricity, which is basically minor changes to bits and pieces around the edges on stuff like the super peak hedging contracts, and if things don't change, look out - we'll regulate. We'll be meaner and tougher.
There's still the Frontier report of course, which Cabinet will decide on by next month.
In the mean time, you tinker and threaten. Sound tough enough that voters know you’re serious, but not actually go DEFCON 1 and risk spooking markets in which you’re actually trying to attract investment, particularly offshore.
Plus, Chris Quinn told my show the other day they’d lawyer up to high heaven and fight anything like that. Messy.
So on supermarkets I reckon they’ll tinker. Options on the cards? Put supermarkets on the fast-track list, ban pocket pricing, and empower existing franchises to be more independent - buying their stock from wherever they like, setting their own prices, etc.
Slap a threat to legislate for the nuclear option across the headline of your press release if the tinkering doesn’t happen or isn’t working.
Throw the ball back in the duopoly’s court.
This would simultaneously satisfy ACT (who hate the nuclear options) and the politics of perception.
It goes further than Labour went, but doesn’t risk the court battles and potential for major changes not actually working to bring prices down.
Which is the whole point.
One thing’s certain, whether it’s electricity bills or checkout prices, the chances of a return to the good ol’ days of pre-Covid prices when we could butter the toast and fire up the heated towel rail with gay abandon are slim to none.
Ryan Bridge is a New Zealand broadcaster who has worked on many current affairs television and radio shows. He currently hosts Newstalk ZB's Early Edition - where this article was sourced.
7 comments:
Rates rates rates and more rates
For supermarkets and big box building stores the government should charge $25 per day per car parks. 200 car parks = $5 000 per day or $1 820 000 per year. This money would go to the city councils in exchange for free parking everywhere else in the city. The supermarkets, malls and building stores would scream however the government would immediately make the fee $50 per day. No more screaming. This arrangement would allow smaller retailers to compete and grow. We need competition.
Milton Friedman (1994): “Inflation is always and everywhere a monetary phenomenon”. Price levels increase when too much money is pumped into the economy due to excessive credit demand. Nobody without a printing press can cause inflation, it is solely a monetary phenomenon. Inflation is caused solely by government/central bank printing money.
Just change the way the electricity is charged. At present it is all charged at the price of the highest cost. So we pay the same for low cost hydro as for high cost wind and solar. There is zero incentive for the suppliers to even try and make more cheap energy at the moment.
They were even caught purposely spilling water to ensure high cost power was used. The system is broken, but why would National want to change this. The group that runs them, NZ Initiative, are the ones making the money from our misery.
I understand this is a novel idea and stretching reality rather far but how about We (New Zealand) pretend We are a free, capitalist country and let the customers decide, with their $$$, where they shop?
the best thing Nicola Willis can do to fix NZs enduring, life altering, obscenely over charging, BIG BUSINESS CARTELS is resign!
Then Luxon can promote someone with the intellect, experience. and integrity required to fix very large, complex problem, whilst battling very wealthy organisations who will use their financial might to fight to the death.
the big and small electricity use group wrote a letter.....
The letter takes aim at the four big power generation companies Genesis, Contact, Mercury and Meridian, also referred to as gentailers, because they compete at the retail level.
"When a handful of companies control both generation and retail supply, the competitive pressures that should attract new investors and drive innovation, efficiency, and fair pricing are severely diminished," the letter said.
The letter was signed by groups representing big and small energy users, small retail energy suppliers, and a cross-section of industry organisations representing a broad range of sectors.
Consumer NZ chief executive Jon Duffy said the state of the energy sector was at odds with Luxon's economic vision.
"We're never going to grow the economy if people can't afford the inputs for growth," he said.
"What we are concerned about is a lot of people and an increasing number of people are being faced with pretty stark choices about whether they can heat their home or put food on the table. Those sort of tough decisions."
And don't worry about Nicola. the banks owe her for sponsoring legislation which stopped them having to pay back the millions they stole in overcharged fees!
I agree with CXH. The other thing they need to do ban future large scale wind/solar installation: it's unreliable, unaffordable and generates a lot of waste materials when decommissioned. New hydroelectricity is fine because it's sustainable and provides consistent power in a wet nation like ours.
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