You can critique the Labour-Greens power-policy on a number of levels. Where do they pluck their estimates of 5000 jobs and $450 million dollar boost to ‘the economy’ from? What happens if our power companies respond to reduced windfall profits by sacking all their staff and scrapping expenditure on the maintenance of their assets?
You can even claim that it amounts to nationalisation of the energy sector and ‘North Korean style economics’, if you don’t actually know what nationalisation is and think that North Korea is a country where publicly listed companies own the electricity infrastructure and pay dividends to private shareholders.
But you can’t fault the politics. The government needs the partial sale of Mighty River Power to succeed. It’s their signature achievement. English needs the cash, and Key has bled so much political capital and invested so much time on this policy that it has to work. And now the shares are finally on sale to New Zealand buyers. It lists on the NZX early next month. They must have felt like they’d finally made it.
But now Labour and the Greens have announced that if they’re elected dividends from these companies will be minimal. How do you quantify that if you’re a risk analyst for an investment fund? No wonder National are furious, and Simon Bridges was close to tears in Parliament yesterday spluttering about the decline in Contact Energy’s share price.
Maybe the market won’t care, and the float will be a success. But if it isn’t, I don’t think the public will be sympathetic when the government blames the opposition. This is an unpopular policy, and government Ministers blame Labour every time they spill their coffee. It’ll also leave English trying to raise money, either through borrowing, spending cuts or tax increases, all of which would kick in in 2014. Election year.