'Over the moon' as 'Keep Our Assets' protest draws 1000

After what I've seen in energy news this week alone, I'm starting to think 20 yrs is a bit too generous.  Graphene is coming on strong now, several ultra capacitors, even LENR and some interesting developments there, extremely interesting new solar developments using nanotech or infrared graphene layers, even lithium air batteries are about to become a reality.  We have working artificial photosynthesis prototypes generating hydrogen from only water and sunlight -which could then be fed into a small bloom box home energy server (fuel cell).  When you think about what is happening now it will be unimaginable where things are in 20yrs.  I surely hope no one is buying stock in classical energy companies, that stock is going to go down in flames in the not too distant future.

Sorry citirise, that's just wrong on so many levels.

First, any growth in micro-generation in the next 20 years is likely to only cover the increase in demand for electricity assuming (a) not everyone moves to Australia, and (b) NZ industry doesn't collapse completely. Industry in particular can't survive on micro-generation - how many solar panels does it take to power an aluminium smelter?

Second even if we do get growth in the micro-generation sector it is unlikely to follow Moore's Law which only refers to the doubling of the performance of computer chips.

Third, if micro-generation starts to make a dent on the profits of electricity companies they will simply lower the price of electricity to reduce the incentive for micro-generation - which will at least slow up the process. We have significantly more than 20 years of mains power ahead of us.

Finally, if correct, your arguments provide two good reasons for not partially privatising the electricity companies as (a) if the companies know their time is limited, they are likely to maximise profits while they are able to (i.e. we would get 20 years of electricity misery), and (b) saddling "mum & dad investors" in New Zealand with $6 billion of worthless shares is very unlikely to have a positive effect on the country's economy.  

Dumb to partially sell soon to be obsolete and bankrupt power companies, while at the same time holding a controlling stake and building more future proof SOEs in the process and without borrowing money!? Personally I think John Key is a hell of a businessman and we'll have a bright financial future for all NZ if we follow his logic and do what it takes. Anyone who thinks otherwise has no grasp of the global economic crisis and just how well Key has gotten us through this.

I shudder to think what the crisis would have done to NZ with Labour in control. Key, like most insiders in the power industry know off-grid power is the future. Progress towards clean, cheap off-grid power is adhering to Moore's Law doubling every 18 months. If it were up to Labour then 20yrs from now we would have a huge stake in power companies billions in debt and going bankrupt, no new assets or positive economic growth, and massive debt. I am going to save this url and bring back to attention in 15yrs when you run your house off grid via a small device bought at Harvey Normans for $1200. I'll then say "So, how are your power companies doing?"

I'm getting heartily sick of the "Labour did it too" response to neoliberal idiocy. As if pinting out that Labour did stupid things 20 years ago makes it ok for the Tories to do them now.

The fact that the 80s Labour governments did idiotic things doesn't change the fact that selling assets is still idiotic.

I'm not a Labour supporter but they've spent plenty of energy trying to tell you that they changed their ideas about this.

So, "how is it different?"? It isn't. And it's still dumb.

Good question Autonomouse. If you read the literature on neoliberalism, it suggests that a number of early attempts at privatisation of state assets in the 1980s failed, leading to a period that began in the 1990s where governments were buying back state assets (e.g railways .. or Air NZ) to keep them functioning, or re-regulating industries that had been deregulated (e.g. the water industry in the UK). When Labour sold the assets 20+ years ago, we didn't really know what to expect. Now that we do, to undertake another wave of privatisation without public concent seems foolish and arrogant - and it would be so whether it was a National or future Labour government doing the selling.

I wonder what's changed since Labour's big sell off of assets during the late 80's (Goff, Mallard & King all involved at that time).  Labour sold off 15 state assets worth approx $10b and I dont recall any public consultation, or pre election notification of their intent at that time.

I guess it's all just play the heart string politics as opposed to working toward the betterment of the country.

So Cityrise, how exactly was the "anti- smacking bill" campaign against the last Labour Government any different from the ssset sales campaign now?

Rightly or wrongly both are issues on which the public have clear and stong opinions and obviously opposition parties will campaign on the issue if it is in line with their policies. This is clearly the case with Labour, Greens, NZ First, Mana, Maori, and the Conseravtive party.

No one disputes that obesity, child abuse, out of control drinking culture are important issues, but obviously National think selling some/part of our assets are a higher priority.

You seem to find it easier to attack legitimate protest than to defend the sales themselves. 

It's also not a good idea to label the majority of the public ( all opinion polls) who oppose asset sales as "sheep" 

Opponents of National are unfortunately transforming NZ  to the "American" style of single issue politics.  In the US is it abortion, or gay marriage that drives all voting.. now in NZ they are trying to make "asset sales" the single voting issue.  Along with this single issue mentality comes misinformation, disinformation and fear mongering.  Shame on any Kiwis falling for this political nonsense.  Some actually believe all state assets are being sold off and now we're all going to die.  Opponents of National are milking this single issue nonsense and loving it.   I guess it is all they have left, sheer desperation on their part and unacceptable behavior when this country faces so many real issues (obesity, child abuse, out of control drinking culture) - no, let's keep the sheep focused on one issue.

Probably co-incidental to my early post re untrue information from Labour's David Parker, but this morning a popular blogger David Farrar (Kiwiblog) has directed readers to the Government press release reported here today:

http://tinyurl.com/78c3txj  

Perhaps the ODT might also report this very recent item, and assist readers in providing some clarity into the debate.

To rational response I can only comment that I am referring only to current prices and variations between suppliers, which have stabilized probably due to the effect of the Switch website.

- Editor: We have published a report on thjis issue today. Click here 

I wonder how many Labour MPs are shoring up cash to buy the assets that are out of reach from the majority of thier supporters.

This is theft on a grand scale by the rich from the poor. Surely then the poor are justified in stealing from the rich in whatever way they can! I know two wrongs don't make a right, but the rich after all are our leaders, they set the example.

@ Rob Fischer and Tatterjack. I think you both need to relook at the graph and realise that the bottom of the graph shows the months and the side/vertical left of the graph shows the cost per year in $. The spike alone from Contact is almost double what the other companies were.  

The one month standing, Jun 2012, does not suggest that the company is the cheapest, all it states is the standing for that month.

The graph history would suggest that this is the beginning of Contacts spike i.e. massive price increase. 

@ cityrise, I like your comments and hope that you are correct and we are heading in this direction however, I don't believe this is the motivation behind Nationals assest sales. 

It was a minister named Max who claimed competion would drive down power prices. This never happened.

Tatterjack. Apologies. You are right. I was looking at a list of parent companies. However, it has only been (marginally) the most expensive for a couple of months - which is hardly evidence of a superior private sector. In contrast, Contract Energy was the most expensive by a large margin and for a long time. As I noted, it will take them a long time of having the lowest prices to give that money back. Again, hardly evidence of a superior private sector.

47% voted  for National and in theory for asset sales although many National voters don't like that policy as all the opinion polls clearly show.

The collective vote for parties that opposed Asset sales - Labour, Greens, NZ First, Mana, the Conservative Party and the Maori is 50.29%.

Peter Dunn may give them the vote in the house to ram this through but there is not a mandate from the election.

Some mandate! 

quoting  Rob Fischer

"Mercury and Trustpower as the most expensive at the moment ... both of which are private companies."

Sorry, Mercury, the most expensive is a SOE.

checkout: http://tinyurl.com/d7mapv2

Selling assets makes no sense.

Look at the numbers. We make more keeping them than we ever will selling them. If Jonkey was ever really worried about our debt he wouldn't have given away millions in tax cuts.

Asset sales are ideological. Simple as that. Tories say less government. I say less poverty, thanks.

The future is going to be renewable off-grid power.  Big power companies and stations will not exist in 20yrs time, anyone that knows the industry knows this to be true.  Get rid of these obsolete assets as soon as possible!  Within 10yrs solar will be less than 30c a watt, and lithium air batteries will store surplus solar for you.  In 15yrs max we will go off grid and supply ourselves all the power we need for a startup cost of a couple thousand or less.  Buying the ability to go off grid will be like buying a heatpump from Harvey Normans.  Feel free to revisit this post in 15yrs and thank National for ditching a dying industry.

Tatterjack. I don't know whether you are trying to be ironic or don't understand the graph but the link you gave shows Mercury and Trustpower as the most expensive at the moment ... both of which are private companies. Contact Energy is the lowest as you say ... but I suspect it will take them a at least a year of substantially lower prices to make up for what looks like a plundering of their customers between June 2010 and August 2011. State owned Genesis and Meridian are both middle of the road now ... despite being fattened up for sale. If the graph is correct, the convergence of prices this winter is a little worrying as it suggests, with asset sales approaching, there is less competition in the market and less choice for consumers. Get ready for higher prices ....

http://tinyurl.com/7sbdxg3

November last year the country had its say on the issue of asset sales and the answer was 'yes'.  Why would the government listen to the minority now?

Tatterjack, I think you maybe misinterpreting the alphabetical legend, on the graph, for a list of the cheapest power retailers. 

If you were to look at the chart I think you'll find Contact, as most people already know, is by far the most expensive retailer on the graph.

Genesis, Meridian and Powershop are at the most economic end of the scale.

However, if you continue to read 'About the Graph' you will see the technical details about the graph and how it was compiled.

To comment on the article. It is good to see people out in force to stand up against such a stupid idea. Would John Key sell his own assets to pay bills or let the profit from these assests pay the bills? Probably neither, he'd find a way for the tax payer to pay it for him.

You don't get anymore money from an asset once it's sold. Key is not stupid, he know's this. Which leds to the only logical conclusion that their must be an alterior motive behind his actions.

I'm sure, once John Key is out of office, that his international business profile will be on an all time high after selling his country's assets.

A turnout of 1000 is actually very good - anyone who has any interest in politics knows that to get people to actually protest rather that sit at home and mutter about the issue is a major acheivement. This is an active minority clearly ( from all the opinion polls) supported by the inactive majority.

Why sell an asset producing a return of 8% when current borrowing costs are approx half of that? Where else is the taxpayer getting that sort of return?

The reinvestment argument doesn't stand up either as you lose the income form the existing asset and there is an lag before the replacement asset backs a return if at all. Most economic commentators don't support these asset sales - it is purely an ideoligical choice by the government.

Agree.

As long as the government keep their majority share (unlike Labour's previous round of asset sales) I fail to see what the issue is.

This issue is turning into another situation tailored for Winston Peters where he can capitalise on the ignorance and misguided nostalgic views of his core constituents (and those at the socialist end of political spectrum).

Govt might lose 49% of its dividend streams but I would be surprised if any of the State owned assets could yield a return on investment greater than the cost of interest required to borrow the same amount of capital freed up by partial asset sales.  

Can someone tell what information is available now that wasn't available when National campaigned on this exact issue and secured 47% of the vote?

Contact Energy, a private company is the cheapest power retailer in Dunedin. Note that the state-owned ones are the dearest!

See here (Data from Powerswitch);

http://tinyurl.com/7sbdxg3

Mmmm 1000? Not a heck of a lot of people really considering the overall population of the Dunedin area!

It's clear we have been living beyond our means for some time. We are a small remote country partaking in a fantasy of borrowing and belief that our economy can support a high standard of living.

In the current international economic climate the safest option is to clear debt and protect ourselves from recessions and financial rating drops. These have the power to devastate our country immediately unlike asset sales which we will still have majority share anyhow.

Sure we can keep our assets if the majority are for it, but what sacrifices are we prepared to make instead?