The Big Four gentailers (Contact, Genesis, Meridian and Mercury) have just reported combined operating earnings of $1.86 billion for the six months to December 2025. That’s a jump of roughly 45% on the same period last year. Their combined dividend payouts rose 10% to $551 million. Meanwhile, the amount they actually invested in new generation was flat.
As the Post’s Tom Pullar-Strecker pointed out, Contact and Genesis are raising $925 million from investors for new projects, but that’s less than the four firms will pay out in dividends over the full year. They’re taking money from shareholders with one hand and handing it back with the other.
Household power prices jumped 12.2% last year. Meridian is now warning of another 7% hike this year. Some Genesis customers are facing increases of 30%. Lines company Aurora Energy in Otago is pushing charges up by 21%. And in Dunedin, a Powershop customer was told her bill would rise by $87 a month from April.
These are not abstract numbers. This is real pain, hitting real households, in what everyone agrees is the worst cost of living crisis in living memory. And yet the companies responsible are celebrating record profits.
If you’re wondering why people feel that New Zealand is broken, this is a great example.
Duncan Garner says what politicians won’t
The most forceful commentary on this has come from Duncan Garner, writing in the Listener today. Garner was reporting from the Parliamentary Press Gallery in the late 1990s when energy minister Max Bradford broke up the old electricity monopoly and promised that more competition would deliver lower power prices. Garner remembers his flat’s power bill in 1998 barely hitting $100 a month. Now, with just two people in his house, he says it’s around $500.
His verdict is blunt: “Bradford’s reforms have failed. True competition does not exist.” He calls the gentailers’ profits a “surge” that “should be embarrassing”, and argues that the government’s own majority-owned companies (Meridian, Mercury and Genesis are 51% Crown-owned) are charging record prices while Kiwis count every dollar.
Garner’s language captures the raw frustration: “We have become pawns in their game. We are mobile Eftpos machines emptying our accounts for these few companies — companies that were gifted all the hydro and associated assets built by our grandparents’ generation.”
And then the kicker, aimed squarely at the Beehive and Parliament: “The silence from Christopher Luxon and Chris Hipkins is stunning. Are they both so heavily out of touch with ordinary New Zealanders that they’ve missed this?” He describes both leaders as “tone deaf, brain dead, and clearly not reading the room.”
Garner is right. On this issue, the political class is failing us.
He doubled down on a follow-up podcast two days ago, laying it out with even more force. “In Luxon and Hipkins, the two main players, all I hear is two signed up corporate hacks saying ‘it’s the market’. Well the market ain’t working for the people, and it’s broken. Never before have a group as big as 5 million people look so damn weak and so damn powerless. Something needs to happen. But who will step up and truly lead us on this? I can’t find them.”
Simon Bridges goes further
On Garner’s podcast this week, former National leader Simon Bridges went further still. Bridges, now CEO of the Auckland Business Chamber, didn’t hold back. The number one issue he’s hearing from Chamber of Commerce networks around the country is energy costs. He said he was “flabbergasted” at the way the media has been “picking up the press releases of these gentailers and running them uncritically”, running what he called “puff pieces” that parrot the companies’ claims about investing in new generation.
Bridges wasn’t buying it. The gentailers, he said, “are not remotely going to meet even current demand for electricity and energy in this country, let alone where we’re going.” He pointed to de-industrialisation, the growing demand from tech and data centres, and the basic needs of households.
Then Bridges named the structural problem: “We need gentailer reform.” He called the current setup “outrageous”: four companies controlling over 90% of both generation and retail. “Economics just tells me that doesn’t work,” he said. “It doesn’t give up enough energy and it keeps prices high.”
When Garner pushed on the profits, Bridges didn’t mince his words. “This is at a time where the government’s the majority owner and also at a time when New Zealanders have been doing it the hardest they’ve ever done it in the cost of living crisis.” Garner agreed, putting it bluntly: “I think that’s f**king outrageous.”
Bridges also landed a punch on David Seymour. He gave the Act leader a “brickbat” on the gentailer issue, saying Seymour is “completely missing the ball” — worried that breaking up the gentailers might “shock the market”. Bridges was scathing: “My fourth form economics tells me the reason these gentailers are in such a good position, it’s got nothing to do with the market. It’s about the fact that Piggy Muldoon a long time ago did the hydro… and we’ve given them to them.”
The public paid for these assets. The state built the hydro dams and the infrastructure that generates this country’s electricity. The gentailers were handed all of it, and now they’re extracting super-profits from the very people who own most of the system.
Consumer NZ and business come into alignment
It’s not just commentators saying this. The alignment across consumer groups, business organisations, and independent retailers is now remarkable.
Consumer NZ has been banging this drum for years. This morning, with the half-year profit results rolling in, it published a pointed commentary asking how it is fair that the companies are reporting large profits on the basis of quickly rising power prices. A Consumer NZ survey found that nearly half of respondents thought the price of their latest power bill was not fair, and 46% thought gentailer profit levels were not justified.
Consumer NZ is asking how it is fair that power prices are rising at the same time as power companies are reporting large profits.
Chief executive Jon Duffy said the gentailers’ “social licence” is starting to fade. Consumers see companies talking “year after year” about needing profits to invest in generation, he said, but the generation doesn’t arrive, “at least in the quantities that we need to lower prices. Consumer patience is running out.”
Earlier this month, Consumer NZ warned that power prices would rise at least another 5% in 2026. Powerswitch manager Paul Fuge said that was a conservative estimate. He says that prices are, in real terms, now 60% higher than when the market was reformed 25 years ago. One in five New Zealanders went to bed early last winter to stay warm. One-quarter went without heating when it was cold. Nearly one in five cut back on food or other essentials to pay a power bill.
And it’s not just households. Last year, a broad coalition of consumer groups, major energy users, small retailers, and business organisations sent an open letter to the Prime Minister calling for urgent and comprehensive reform of the energy sector. The letter said: “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.” They described the electricity market as “dysfunctional” and holding back New Zealand’s productivity. The time for incremental adjustments, they said, has passed.
Simon Bridges echoed this on the podcast. Affordability, he said, “whether you’re a business or a household, is still a really big issue.”
When Consumer NZ, major energy users, and business groups are all speaking in similar terms, it’s no longer a niche complaint. It’s a structural indictment.
A Broken market, by design
Let’s be clear about what’s going on here. The gentailer model — where the same company generates electricity and retails it to consumers — is a structural problem. Bridges put it plainly: they control over 90% of both generation and retail. That’s not a market. That’s an oligopoly.
When these companies can generate the power and set the retail price, the incentive to compete on price evaporates. Instead, they compete on financial engineering and dividend payouts. The result is exactly what we’re seeing: record profits during a downturn, rising prices during a cost of living crisis, and investment in new generation that is, as Bridges said, nowhere near sufficient.
The wholesale market is structured so the most expensive generator sets the price in each half-hour period, and pays all generators at that rate. That means cheap hydro generators get paid the same high rate as gas. Nice work if you can get it. As Garner put it on his podcast: “When costs fall, profits surge. When risks rise, prices surge. Consumers lose either way.”
And who designed and oversees the market? The government. Who collects the dividends from the profits? The government. Who refuses to intervene while households are squeezed? The government.
The Electricity Authority recently acknowledged the problem is real, launching a plan to “level the playing field” between gentailers and independents. But Consumer NZ’s Paul Fuge was unimpressed, saying the changes were “too little, too late” and fell “short of the major reform we believe is needed.” Both companies that won Consumer NZ’s 2025 People’s Choice power company award (Flick Electric and Frank Energy) have since closed or been absorbed by the very gentailers they were supposed to compete with.
That tells you everything about how this market really works.
The Government is literally profiting from the pain
Here is the integrity problem that nobody in Wellington wants to talk about. Three of the four gentailers are 51% Crown-owned. The Crown collects dividends from the very companies gouging the public. It’s a conflict of interest so vast it should be a scandal. Instead, it’s just business as usual.
The government is both the majority shareholder and the regulator, while pocketing dividends. Whether or not any politician says this out loud, it creates a built-in incentive to prefer managed anger over structural change. Former energy sector public servant Judith Aitken put it well when she argued that the dominant, state-owned gentailers have “been highly beneficial” for the state and therefore the state is unlikely to be comfortable about reducing that benefit.
Meanwhile, the Government tells the public to shop around and switch plans, as if the country’s electricity affordability crisis is mainly a consumer education problem. Switch to whom, exactly? The independent retailers are being wiped out. The gentailers dominate 85-90% of the market. Telling struggling families to “compare plans on Powerswitch” while the system is rigged against them is not a solution. It’s an insult.
Where are the politicians?
What makes this so infuriating is the sheer political cowardice on display. Both major party leaders have just given State of the Nation speeches. Neither addressed the electricity market in any meaningful way. Neither proposed gentailer reform. Neither even acknowledged the scale of what’s happening.
Christopher Luxon is content to talk about LNG terminals and tinkering. His Energy Minister Simon Watts points to falling futures prices and claims the government’s strategy is working. But as Garner wrote: “If gentailers are making record profits, why don’t bills come down? Why is relief nowhere to be seen?”
National’s big energy play is a proposed $1 billion LNG import terminal. It does nothing to fix the gentailer oligopoly. It does nothing to address the fact that four companies dominate both generation and retail. It’s a supply-side solution to a market-structure problem. And it locks us further into fossil fuel dependency.
From the opposition benches, Labour’s Megan Woods has called for confronting “our broken energy system.” Fine words. But where is Labour’s policy to actually fix the market? Where is the call for structural separation? Chris Hipkins has made general noises about wanting more competition, but when pressed on whether Labour would break up the gentailers, he equivocates. Breaking up companies, he warns, is “a big step.”
Meanwhile, power bills go up another 12%, and another 7%, and another 30% for some. How big do the steps in the wrong direction have to get before someone takes a big step in the right one?
The Greens are similarly absent. They’ll talk about solar subsidies and climate targets, but the structural problem — the gentailer model itself — barely registers in their public messaging. For a party that claims to care about inequality and corporate power, this is a glaring blind spot.
You’d think this would be natural territory for the political left: standing up against corporate profiteering from essential services. But Labour and the Greens are missing in action.
The Lone exception: Shane Jones
There is, remarkably, one politician who has put his name to a promise on this. Shane Jones, NZ First’s deputy leader, has said the pricing decisions of the electricity gentailers would represent “about 99%” of his election campaign. He has called for breaking up the gentailers and even floated “renationalisation”. He’s promised to take the matter to his party’s AGM to seek a mandate to campaign on it.
This has gone largely unreported.
As Pullar-Strecker noted, “Jones is clearly hoping to extract a political price… If that resonates with voters in November, the question may be the extent to which the major parties feel motivated to help protect the gentailers come coalition negotiation time.”
Jones has form on this kind of populist economic rhetoric. Whether he’d actually follow through in government is another question entirely (as I’ve noted in previous columns), NZ First has a long history of promising to fight corporate power and then going quiet once in coalition. But at least Jones is saying the words. At least someone in Parliament is naming the problem. That he’s the only one tells you everything about the state of our politics.
Broken New Zealand, again
Regular readers will know I’ve been writing a lot of columns on what I call “Broken New Zealand”, which is an argument that crony capitalism and oversized corporate power have hollowed out our political economy. The electricity market is perhaps the single best example of the thesis.
Consider the pattern. A small number of dominant companies control an essential service. They extract super-profits from captive consumers. They deploy PR machines and lobbyists to defend the status quo. The media often runs their lines uncritically, as Bridges pointed out this week. Politicians from both sides are either too scared or too ideologically captured. The public pays, and pays, and pays.
It’s the same pattern we see in supermarkets. In banking. In insurance. The details differ, but the underlying dynamic is identical: concentrated market power, protected by political inertia, sustained by a political class that won’t rock the boat.
Economist Cameron Bagrie has warned that after New Zealand’s bold pro-competition reforms of the 1980s, “it feels like we have gone 360 degrees — many industries have reconsolidated into powerful duopolies or oligopolies.” Weak competition, he says, “just inhibits innovation and drives complacency.” Professor Robert MacCulloch has called it a “chumocracy” in which a clubby network of insiders trade on connections rather than merit.
The electricity market fits this description perfectly. The gentailers weren’t built through entrepreneurial brilliance. They were handed publicly built infrastructure and told to run it as a business. The assets belong, in origin, to the people of New Zealand. The profits should flow back to the public, not be extracted from the same people.
The case for breaking up the gentailers
A serious reform would require structural separation: no company should be allowed to operate as both a major generator and a major retailer in the same market. Generation and retail should be distinct businesses with strict limits on cross-ownership.
This isn’t radical. It’s been done elsewhere. And it’s what the evidence demands. The OECD itself has said that in markets as concentrated as ours, “structural solutions such as break-ups, although as a measure of last resort, could be warranted.”
The goals of a genuine breakup are straightforward. First, create a wholesale market where independent retailers and large users can access supply on genuinely non-discriminatory terms, without having to buy risk cover from their biggest competitors. Second, force price discovery into the open, so retail margins can’t be justified by opaque internal transfer pricing. Third, reduce the incentive to manage scarcity — when generation profits can be protected by retail integration, delayed investment and strategic withholding always remain suspicious.
There is public support for this. Polling reported by RNZ showed 49% of respondents supported breaking up the gentailers’ generation and retail arms to improve competition, and 62% supported government underwriting of new generation if it would bring prices down. Those are not fringe sentiments. They are majoritarian numbers.
If politicians want to claim they fear unintended consequences, the obvious answer is: design the transition properly and do it anyway.
A Zeitgeist moment, wasted
I keep coming back to the word “Zeitgeist”. There is a mood in New Zealand right now: a deep, pervasive frustration with a system that seems to work for the powerful and punish everyone else. The polls show it. The economic data shows it. The queues at food banks show it. The 66,000 people who left the country last year show it.
The electricity market is the sharpest expression of this broken system. It’s an essential service where a handful of companies make extraordinary profits while ordinary people struggle to heat their homes. And the Government, which owns most of these companies, does nothing.
Where is the political courage? We need someone to stand up and say: the gentailer model has failed, the Bradford reforms were never finished, and it’s time to break these companies apart. It would be popular, justified, and genuinely transformative.
But the mainstream parties won’t do it. Luxon won’t do it because National is hostage to its corporate base. Hipkins won’t do it because he’s too cautious, and Labour is captured by fiscal orthodoxy and too worried about being seen as anti-business. Seymour won’t do it because, as Bridges noted, he’s now captured by the obligations of being Deputy PM, gone risk-averse, saying less of the stuff that once made Act interesting. The Greens are distracted by other battles.
Garner’s closing words on his latest podcast deserve to be replayed to every MP: “Something needs to happen. But who will step up and truly lead us on this? I can’t find them.”
Neither can anyone else. And every month that passes, the gentailers bank another round of record profits, send out another round of price increase letters, and the politicians keep looking the other way.
New Zealand deserves better than this. The public built the dams. Our taxes subsidise the system. Our wallets fund the dividends. The least the political class can do is have the guts to fix the market that’s bleeding us dry.
Break up the gentailers. It’s time.
Dr Bryce Edwards is a politics lecturer at Victoria University and director of Critical Politics, a project focused on researching New Zealand politics and society. This article was first published HERE
Household power prices jumped 12.2% last year. Meridian is now warning of another 7% hike this year. Some Genesis customers are facing increases of 30%. Lines company Aurora Energy in Otago is pushing charges up by 21%. And in Dunedin, a Powershop customer was told her bill would rise by $87 a month from April.
These are not abstract numbers. This is real pain, hitting real households, in what everyone agrees is the worst cost of living crisis in living memory. And yet the companies responsible are celebrating record profits.
If you’re wondering why people feel that New Zealand is broken, this is a great example.
Duncan Garner says what politicians won’t
The most forceful commentary on this has come from Duncan Garner, writing in the Listener today. Garner was reporting from the Parliamentary Press Gallery in the late 1990s when energy minister Max Bradford broke up the old electricity monopoly and promised that more competition would deliver lower power prices. Garner remembers his flat’s power bill in 1998 barely hitting $100 a month. Now, with just two people in his house, he says it’s around $500.
His verdict is blunt: “Bradford’s reforms have failed. True competition does not exist.” He calls the gentailers’ profits a “surge” that “should be embarrassing”, and argues that the government’s own majority-owned companies (Meridian, Mercury and Genesis are 51% Crown-owned) are charging record prices while Kiwis count every dollar.
Garner’s language captures the raw frustration: “We have become pawns in their game. We are mobile Eftpos machines emptying our accounts for these few companies — companies that were gifted all the hydro and associated assets built by our grandparents’ generation.”
And then the kicker, aimed squarely at the Beehive and Parliament: “The silence from Christopher Luxon and Chris Hipkins is stunning. Are they both so heavily out of touch with ordinary New Zealanders that they’ve missed this?” He describes both leaders as “tone deaf, brain dead, and clearly not reading the room.”
Garner is right. On this issue, the political class is failing us.
He doubled down on a follow-up podcast two days ago, laying it out with even more force. “In Luxon and Hipkins, the two main players, all I hear is two signed up corporate hacks saying ‘it’s the market’. Well the market ain’t working for the people, and it’s broken. Never before have a group as big as 5 million people look so damn weak and so damn powerless. Something needs to happen. But who will step up and truly lead us on this? I can’t find them.”
Simon Bridges goes further
On Garner’s podcast this week, former National leader Simon Bridges went further still. Bridges, now CEO of the Auckland Business Chamber, didn’t hold back. The number one issue he’s hearing from Chamber of Commerce networks around the country is energy costs. He said he was “flabbergasted” at the way the media has been “picking up the press releases of these gentailers and running them uncritically”, running what he called “puff pieces” that parrot the companies’ claims about investing in new generation.
Bridges wasn’t buying it. The gentailers, he said, “are not remotely going to meet even current demand for electricity and energy in this country, let alone where we’re going.” He pointed to de-industrialisation, the growing demand from tech and data centres, and the basic needs of households.
Then Bridges named the structural problem: “We need gentailer reform.” He called the current setup “outrageous”: four companies controlling over 90% of both generation and retail. “Economics just tells me that doesn’t work,” he said. “It doesn’t give up enough energy and it keeps prices high.”
When Garner pushed on the profits, Bridges didn’t mince his words. “This is at a time where the government’s the majority owner and also at a time when New Zealanders have been doing it the hardest they’ve ever done it in the cost of living crisis.” Garner agreed, putting it bluntly: “I think that’s f**king outrageous.”
Bridges also landed a punch on David Seymour. He gave the Act leader a “brickbat” on the gentailer issue, saying Seymour is “completely missing the ball” — worried that breaking up the gentailers might “shock the market”. Bridges was scathing: “My fourth form economics tells me the reason these gentailers are in such a good position, it’s got nothing to do with the market. It’s about the fact that Piggy Muldoon a long time ago did the hydro… and we’ve given them to them.”
The public paid for these assets. The state built the hydro dams and the infrastructure that generates this country’s electricity. The gentailers were handed all of it, and now they’re extracting super-profits from the very people who own most of the system.
Consumer NZ and business come into alignment
It’s not just commentators saying this. The alignment across consumer groups, business organisations, and independent retailers is now remarkable.
Consumer NZ has been banging this drum for years. This morning, with the half-year profit results rolling in, it published a pointed commentary asking how it is fair that the companies are reporting large profits on the basis of quickly rising power prices. A Consumer NZ survey found that nearly half of respondents thought the price of their latest power bill was not fair, and 46% thought gentailer profit levels were not justified.
Consumer NZ is asking how it is fair that power prices are rising at the same time as power companies are reporting large profits.
Chief executive Jon Duffy said the gentailers’ “social licence” is starting to fade. Consumers see companies talking “year after year” about needing profits to invest in generation, he said, but the generation doesn’t arrive, “at least in the quantities that we need to lower prices. Consumer patience is running out.”
Earlier this month, Consumer NZ warned that power prices would rise at least another 5% in 2026. Powerswitch manager Paul Fuge said that was a conservative estimate. He says that prices are, in real terms, now 60% higher than when the market was reformed 25 years ago. One in five New Zealanders went to bed early last winter to stay warm. One-quarter went without heating when it was cold. Nearly one in five cut back on food or other essentials to pay a power bill.
And it’s not just households. Last year, a broad coalition of consumer groups, major energy users, small retailers, and business organisations sent an open letter to the Prime Minister calling for urgent and comprehensive reform of the energy sector. The letter said: “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.” They described the electricity market as “dysfunctional” and holding back New Zealand’s productivity. The time for incremental adjustments, they said, has passed.
Simon Bridges echoed this on the podcast. Affordability, he said, “whether you’re a business or a household, is still a really big issue.”
When Consumer NZ, major energy users, and business groups are all speaking in similar terms, it’s no longer a niche complaint. It’s a structural indictment.
A Broken market, by design
Let’s be clear about what’s going on here. The gentailer model — where the same company generates electricity and retails it to consumers — is a structural problem. Bridges put it plainly: they control over 90% of both generation and retail. That’s not a market. That’s an oligopoly.
When these companies can generate the power and set the retail price, the incentive to compete on price evaporates. Instead, they compete on financial engineering and dividend payouts. The result is exactly what we’re seeing: record profits during a downturn, rising prices during a cost of living crisis, and investment in new generation that is, as Bridges said, nowhere near sufficient.
The wholesale market is structured so the most expensive generator sets the price in each half-hour period, and pays all generators at that rate. That means cheap hydro generators get paid the same high rate as gas. Nice work if you can get it. As Garner put it on his podcast: “When costs fall, profits surge. When risks rise, prices surge. Consumers lose either way.”
And who designed and oversees the market? The government. Who collects the dividends from the profits? The government. Who refuses to intervene while households are squeezed? The government.
The Electricity Authority recently acknowledged the problem is real, launching a plan to “level the playing field” between gentailers and independents. But Consumer NZ’s Paul Fuge was unimpressed, saying the changes were “too little, too late” and fell “short of the major reform we believe is needed.” Both companies that won Consumer NZ’s 2025 People’s Choice power company award (Flick Electric and Frank Energy) have since closed or been absorbed by the very gentailers they were supposed to compete with.
That tells you everything about how this market really works.
The Government is literally profiting from the pain
Here is the integrity problem that nobody in Wellington wants to talk about. Three of the four gentailers are 51% Crown-owned. The Crown collects dividends from the very companies gouging the public. It’s a conflict of interest so vast it should be a scandal. Instead, it’s just business as usual.
The government is both the majority shareholder and the regulator, while pocketing dividends. Whether or not any politician says this out loud, it creates a built-in incentive to prefer managed anger over structural change. Former energy sector public servant Judith Aitken put it well when she argued that the dominant, state-owned gentailers have “been highly beneficial” for the state and therefore the state is unlikely to be comfortable about reducing that benefit.
Meanwhile, the Government tells the public to shop around and switch plans, as if the country’s electricity affordability crisis is mainly a consumer education problem. Switch to whom, exactly? The independent retailers are being wiped out. The gentailers dominate 85-90% of the market. Telling struggling families to “compare plans on Powerswitch” while the system is rigged against them is not a solution. It’s an insult.
Where are the politicians?
What makes this so infuriating is the sheer political cowardice on display. Both major party leaders have just given State of the Nation speeches. Neither addressed the electricity market in any meaningful way. Neither proposed gentailer reform. Neither even acknowledged the scale of what’s happening.
Christopher Luxon is content to talk about LNG terminals and tinkering. His Energy Minister Simon Watts points to falling futures prices and claims the government’s strategy is working. But as Garner wrote: “If gentailers are making record profits, why don’t bills come down? Why is relief nowhere to be seen?”
National’s big energy play is a proposed $1 billion LNG import terminal. It does nothing to fix the gentailer oligopoly. It does nothing to address the fact that four companies dominate both generation and retail. It’s a supply-side solution to a market-structure problem. And it locks us further into fossil fuel dependency.
From the opposition benches, Labour’s Megan Woods has called for confronting “our broken energy system.” Fine words. But where is Labour’s policy to actually fix the market? Where is the call for structural separation? Chris Hipkins has made general noises about wanting more competition, but when pressed on whether Labour would break up the gentailers, he equivocates. Breaking up companies, he warns, is “a big step.”
Meanwhile, power bills go up another 12%, and another 7%, and another 30% for some. How big do the steps in the wrong direction have to get before someone takes a big step in the right one?
The Greens are similarly absent. They’ll talk about solar subsidies and climate targets, but the structural problem — the gentailer model itself — barely registers in their public messaging. For a party that claims to care about inequality and corporate power, this is a glaring blind spot.
You’d think this would be natural territory for the political left: standing up against corporate profiteering from essential services. But Labour and the Greens are missing in action.
The Lone exception: Shane Jones
There is, remarkably, one politician who has put his name to a promise on this. Shane Jones, NZ First’s deputy leader, has said the pricing decisions of the electricity gentailers would represent “about 99%” of his election campaign. He has called for breaking up the gentailers and even floated “renationalisation”. He’s promised to take the matter to his party’s AGM to seek a mandate to campaign on it.
This has gone largely unreported.
As Pullar-Strecker noted, “Jones is clearly hoping to extract a political price… If that resonates with voters in November, the question may be the extent to which the major parties feel motivated to help protect the gentailers come coalition negotiation time.”
Jones has form on this kind of populist economic rhetoric. Whether he’d actually follow through in government is another question entirely (as I’ve noted in previous columns), NZ First has a long history of promising to fight corporate power and then going quiet once in coalition. But at least Jones is saying the words. At least someone in Parliament is naming the problem. That he’s the only one tells you everything about the state of our politics.
Broken New Zealand, again
Regular readers will know I’ve been writing a lot of columns on what I call “Broken New Zealand”, which is an argument that crony capitalism and oversized corporate power have hollowed out our political economy. The electricity market is perhaps the single best example of the thesis.
Consider the pattern. A small number of dominant companies control an essential service. They extract super-profits from captive consumers. They deploy PR machines and lobbyists to defend the status quo. The media often runs their lines uncritically, as Bridges pointed out this week. Politicians from both sides are either too scared or too ideologically captured. The public pays, and pays, and pays.
It’s the same pattern we see in supermarkets. In banking. In insurance. The details differ, but the underlying dynamic is identical: concentrated market power, protected by political inertia, sustained by a political class that won’t rock the boat.
Economist Cameron Bagrie has warned that after New Zealand’s bold pro-competition reforms of the 1980s, “it feels like we have gone 360 degrees — many industries have reconsolidated into powerful duopolies or oligopolies.” Weak competition, he says, “just inhibits innovation and drives complacency.” Professor Robert MacCulloch has called it a “chumocracy” in which a clubby network of insiders trade on connections rather than merit.
The electricity market fits this description perfectly. The gentailers weren’t built through entrepreneurial brilliance. They were handed publicly built infrastructure and told to run it as a business. The assets belong, in origin, to the people of New Zealand. The profits should flow back to the public, not be extracted from the same people.
The case for breaking up the gentailers
A serious reform would require structural separation: no company should be allowed to operate as both a major generator and a major retailer in the same market. Generation and retail should be distinct businesses with strict limits on cross-ownership.
This isn’t radical. It’s been done elsewhere. And it’s what the evidence demands. The OECD itself has said that in markets as concentrated as ours, “structural solutions such as break-ups, although as a measure of last resort, could be warranted.”
The goals of a genuine breakup are straightforward. First, create a wholesale market where independent retailers and large users can access supply on genuinely non-discriminatory terms, without having to buy risk cover from their biggest competitors. Second, force price discovery into the open, so retail margins can’t be justified by opaque internal transfer pricing. Third, reduce the incentive to manage scarcity — when generation profits can be protected by retail integration, delayed investment and strategic withholding always remain suspicious.
There is public support for this. Polling reported by RNZ showed 49% of respondents supported breaking up the gentailers’ generation and retail arms to improve competition, and 62% supported government underwriting of new generation if it would bring prices down. Those are not fringe sentiments. They are majoritarian numbers.
If politicians want to claim they fear unintended consequences, the obvious answer is: design the transition properly and do it anyway.
A Zeitgeist moment, wasted
I keep coming back to the word “Zeitgeist”. There is a mood in New Zealand right now: a deep, pervasive frustration with a system that seems to work for the powerful and punish everyone else. The polls show it. The economic data shows it. The queues at food banks show it. The 66,000 people who left the country last year show it.
The electricity market is the sharpest expression of this broken system. It’s an essential service where a handful of companies make extraordinary profits while ordinary people struggle to heat their homes. And the Government, which owns most of these companies, does nothing.
Where is the political courage? We need someone to stand up and say: the gentailer model has failed, the Bradford reforms were never finished, and it’s time to break these companies apart. It would be popular, justified, and genuinely transformative.
But the mainstream parties won’t do it. Luxon won’t do it because National is hostage to its corporate base. Hipkins won’t do it because he’s too cautious, and Labour is captured by fiscal orthodoxy and too worried about being seen as anti-business. Seymour won’t do it because, as Bridges noted, he’s now captured by the obligations of being Deputy PM, gone risk-averse, saying less of the stuff that once made Act interesting. The Greens are distracted by other battles.
Garner’s closing words on his latest podcast deserve to be replayed to every MP: “Something needs to happen. But who will step up and truly lead us on this? I can’t find them.”
Neither can anyone else. And every month that passes, the gentailers bank another round of record profits, send out another round of price increase letters, and the politicians keep looking the other way.
New Zealand deserves better than this. The public built the dams. Our taxes subsidise the system. Our wallets fund the dividends. The least the political class can do is have the guts to fix the market that’s bleeding us dry.
Break up the gentailers. It’s time.
Dr Bryce Edwards is a politics lecturer at Victoria University and director of Critical Politics, a project focused on researching New Zealand politics and society. This article was first published HERE
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