He has no idea what it is.
Companies found guilty would pay penalties and "hand back every dollar of excess profit."
Labour's Arena Williams supplies the soundtrack: butter up 58%, bread up 45%, mince up 30%. Nearly one in three households couldn't afford enough food.
Ostensibly, big business is ripping off households.
Underlying, Labour has discovered a new crime: charging what the market will bear.
What price is gouging?
Nobody knows. That is the point.
A price is not a moral verdict. It is a signal. It matches what is scarce with what is wanted. It tells farmers to milk, bakers to bake, truckies to drive. Get the signal wrong and the shelves empty.
High prices are rude. They are also how you get more supply. Cap them and you get less of whatever you claimed to care about.
Governments that take over pricing do not abolish scarcity. They hide it. Then they invent queues, coupons, black markets, and speeches about fairness.
Famines are not caused by shopkeepers. They arrive when politics replaces prices.
People are not poor because Countdown has a checkout. They are poor because policy has been stuffing the economy for years -- tax, spend, regulate, then wonder why butter costs more.
Hipkins' answer is more regulation.
Of course it is.
The Greens want KiwiMart: nationalise the shops. Labour wants to police "excess profit." Same instinct. Blame the till. Spare the Beehive.
Hipkins knows better. He has sat in Cabinet. He has watched price controls abroad turn into shortages. He is not stupid.
He is desperate.
Election year. Voters feel the pinch. Someone must be the villain. Business is handy. Government never is.
So we get a law against a word.
Price gouging. Excess profit. Hand it back.
Hand what back? To whom? By whose spreadsheet? The Commerce Commission already has a job. Competition law already exists. What Labour wants is a political cudgel: the power to declare a price immoral after the fact.
That does not feed anyone.
It does discourage the next shipment.
If you want cheaper butter, stop strangling the productive economy. Cut the taxes and the rules that make everything dear. Let prices do their rude, useful work.
Outlawing the signal that keeps the supermarket stocked is not compassion.
It might be how you get some votes. It's also how you empty the fridge.
Labour's Arena Williams supplies the soundtrack: butter up 58%, bread up 45%, mince up 30%. Nearly one in three households couldn't afford enough food.
Ostensibly, big business is ripping off households.
Underlying, Labour has discovered a new crime: charging what the market will bear.
What price is gouging?
Nobody knows. That is the point.
A price is not a moral verdict. It is a signal. It matches what is scarce with what is wanted. It tells farmers to milk, bakers to bake, truckies to drive. Get the signal wrong and the shelves empty.
High prices are rude. They are also how you get more supply. Cap them and you get less of whatever you claimed to care about.
Governments that take over pricing do not abolish scarcity. They hide it. Then they invent queues, coupons, black markets, and speeches about fairness.
Famines are not caused by shopkeepers. They arrive when politics replaces prices.
People are not poor because Countdown has a checkout. They are poor because policy has been stuffing the economy for years -- tax, spend, regulate, then wonder why butter costs more.
Hipkins' answer is more regulation.
Of course it is.
The Greens want KiwiMart: nationalise the shops. Labour wants to police "excess profit." Same instinct. Blame the till. Spare the Beehive.
Hipkins knows better. He has sat in Cabinet. He has watched price controls abroad turn into shortages. He is not stupid.
He is desperate.
Election year. Voters feel the pinch. Someone must be the villain. Business is handy. Government never is.
So we get a law against a word.
Price gouging. Excess profit. Hand it back.
Hand what back? To whom? By whose spreadsheet? The Commerce Commission already has a job. Competition law already exists. What Labour wants is a political cudgel: the power to declare a price immoral after the fact.
That does not feed anyone.
It does discourage the next shipment.
If you want cheaper butter, stop strangling the productive economy. Cut the taxes and the rules that make everything dear. Let prices do their rude, useful work.
Outlawing the signal that keeps the supermarket stocked is not compassion.
It might be how you get some votes. It's also how you empty the fridge.
Rodney Hide is former ACT Party leader, and Minister in the National-ACT Government from 2008 to 2011. This article was first published HERE
3 comments:
Thank you to all farmers and food producers. Butter seems to be the culprit of the grocery price whinge by those who do not supply or make the product . ie Farmers and Fonterra.
If the whinger's can make butter quicker and cheaper they have every right to do it .
Butter is only cream and salt endlessly mixed , but beware the cream required for a pound (400 grams) of butter costs more than the butter purchased at the supermarket.
Similar produce your eggs , fruit and vegetables , flour , meat and fish, all the bits and pieces , go for it whinger"s .
BUT and it is a big BUT, you have to get out of bed continuously all year to be a farmer .
Odd that Hipkins doesn't have a problem with paying unqualified Maori hundreds of millions of dollars for their opinions as " consultants".
A proper rort that Hipkins, Chloe, TPM encourage and support.
That costs everyone in every aspect of their lives in NZ today far more than "excess" profit by businesses
Yet Hipkins is happy to price gouge the taxpayer to his little hearts content. He is happy to run a monopoly that never has to justify it's pricing.
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