NZ POLITICS DAILY: Govt caught offguard by Labour-Green threat to flagship policy

It’s a bold political move that has caught the Government off-guard and threatens their flagship policy. The Labour-Greens joint power policy has plenty of critics, including some on the left, but it has had an immediate impact on a number of levels. Most crucially for David Shearer, it marks a dramatic move away from vague and cautious statements; it is a major and specific policy commitment that affects every household in the country.

The change is enough to turn around one of Shearer’s most vocal critics on the left with Chris Trotter exclaiming Okay! Okay! Okay! I surrender. Shearer Stays. Trotter has a few misgivings about the policy but says it is ‘inspiring’ and will ‘introduce the voters to an alternative Centre-Left government with sufficient smarts and guts to offer real change’.  At The Standard, where Shearer’s timidity has previously been heavily criticised, there is also real enthusiasm – see: NZ Power and the next step.

The model is not only workable, writes No Right Turn, but is in use in Canada and the EU, specifically to reign in excess profits in systems where the market has failed to do so – see: Fixing the electricity market.  And there’s some support for this view from experts and advocates. Energy analyst Simon Terry says single buyer models are common overseas, and they work - see RNZ’s Large power users reject single buyer plan. This view is shared by Victoria University’s Geoff Bertram: ‘It's precisely the sort of thing you need to do to stop the relentless rise of power prices ahead of inflation’ and by both Consumer NZ and Grey Power – see TVNZ’s Labour and the Green's electricity plan commended.

There is another view, of course. Colin Espiner cuts to the chase in his hard-htting column, Labour's crazy new energy policy, writing that the policy is ‘an indication that Labour does not believe it has any hope of winning the next election. In my experience, only political parties that know they have no realistic hope of winning an election propose things they know they will never have to try to implement. Labour's jumped the shark, Joyce reckons. It's hard to disagree’.

Reaction from energy market insiders has ‘been fierce, with some describing it as "extreme" and "an aggressive policy". BusinessNZ chief executive Phil O'Reilly labelled the proposal "economic vandalism" that would destroy a functioning market’ – see Jason Krupp’s Power proposal shocks market. Labour’s rejection of the current market model is deplored by the Herald editorial Labour's back to the future power policy a market killer, arguing that the current market framework offers the best outcome for consumers.  The reader comments on the editorial indicate there are many are very sceptical of that view.

What has also outraged National is the timing, with the policy impacting on Mighty River Power future profits just as the share float is set to go. Contact Energy shares fell almost 5% on the news (see: Contact shares hit by power bill promise), and while some are labelling it as sabotage, David Hargraves thinks it is a very clever move – see: Labour/Green political masterstroke, as doesDanyl Mclauchlan in Kicking the tires out from under them.

The policy has actually been carefully crafted to avoid Labour and the Greens being accused of re-nationalisation. This may actually be a problem long-term as, under current ownership, the government will mostly be buying power from the same generation companies that it will be selling it to as retailers. This could be hugely problematic. It’s hard to avoid the conclusion that Labour and the Greens have taken a very ‘Third Way’ approach (i.e. greater regulation without increased state ownership) when it might have actually been more effective and simple to re-nationalise the energy companies and run them along social lines instead of as SOEs. But the Opposition’s third way approach hasn’t stopped cries of Stalinism and comparisons to North Korea, whichScott Yorke casts a critical eye over in Yes, Steven, this is just like North Korea. For more satire, see The Civilian’s Labour, Greens announce plans to ‘buy all the power’, see what happens.

While John Armstrong says the proposal caught the Government on the hop, he thinks ‘National is privately delighted, however, that Labour should have shifted so far away from the current economic orthodoxy. Add the capital gains tax and National believes Labour risks heading into election year with a manifesto chock-full of unelectable policies’ – see: National gobsmacked at Labour idea. 

On power prices and shares alone, however, the numbers may not be in National’s favour. While many of the 425,000 voters who registered interest in MRP shares may not be impressed with the policy, there are another 1.8 million who voted in 2011 who are more concerned about prices than profits. Labour’s punt on the electricity market may pay very good dividends, even if it means MRP share buyers pay the price.

Other recent important or interesting items include the following:

In the aftermath of the marriage equality legislation passing, is there much more to say about it all? Interesting commentaries and analysis are few and far between, but there are some to be found. In the latest Listener, Peter Wells argues that the demand for the right to marry is a fairly conservative one, and it actually acts to bolster the status quo: ‘It is one of the curiosities of our time that this kind of new-right demand wears the clothing of the old left’. He says that ‘conservative resistance makes gay marriage seem a radical issue. It isn’t – see: Unwedded bliss. Similarly, the University of Canterbury’s Philip Ferguson argues from a Marxist perspective that the issue reinforces that the modern establishment is not particularly racist, sexist or homophobic, but is instead keen to just maintain ‘market forms of discrimination’ and inequality – see: Same-sex marriage: basic justice but no threat to the system.

Nonetheless, it is an historic event, which has garnered significant international interest –  see, for example, TVNZ’s Williamson's 'big, gay rainbow' speech makes world headlines. On a similar, but lighter note, see Toby Manhire’s John Key named among “15 Most Ridiculous World Leaders Of All Time”.

For other humourous and visual insights, see Ben Uffendell’s satirical Civilian blogpost, Marriage destroyed forever, and my own blogpost, Images of gay marriage equality.

Two of the more serious and interesting analyses can be found in Russell Brown’s The Treasure at the End of the Rainbow and Tim Watkin’s Old photo reminds us what marriage equality has won. Brown wonders why politicians can’t work across party lines more often, and Watkin celebrates this week’s change, but admits to some reservations about the public not being involved in the decision.

The marriage equality bill is the latest in a long-line of controversial socially liberal causes pushed through Parliament. It might be the last for a while, as the public focuses more on economic issues, although it’s possible that abortion law reform could re-emerge as a contentious issue – see Nicole Mathewson’s Alter abortion law to reflect real grounds – call. It’s more likely that the regulation of alcohol will be the main moral battleground for reform. 

We now have the legal freedom to marry people of the same sex, but should we have the legal freedom to offend such people? Recently, a homophobic man was convicted for using offensive language against a gay couple – see Isaac Davison’s Man fined for homophobic verbal abuse. On the No Right Turn blog, a very strong case is put that no such criminal conviction should have been made and that freedom of expression is more important than any right not to be offended – see: Bigotry, "offensive language", and freedom of speech.

The latest opinion poll showing National’s support dropping is significant. It comes just after the GCSB scandal, and just at the time when minds are focused on what a Labour-Greens government would mean. This poll suggests that a Labour-Green government could easily be formed if an election was held today – see Vernon Small’s Poll: National's support takes a hit. Small points out that, ‘It is the smallest gap between the two big parties in the poll since just before the 2008 election that swept Helen Clark's Labour Government out of office’. The Standard provides a poll chart suggesting a strong trend for the Opposition – see Mike Smith’s Nats 40.5% in Roy Morgan.

Two very important opinion pieces on the state of the public service in New Zealand both cast doubt on the trust we hold in our officials and the system – see Pattrick Smellie’s Unleashing creativity on The Terrace and Mai Chen’s Alarming signs of state incompetence.

Trevor Mallard recently gave a talk on governance to academics, with some interesting observations and recommendations. He says the ideal Cabinet would have only ten ministers, but that this was ‘was not a popular view among those ranked 8-20 in his own party’ – see the report from Max Rashbrooke: Too many Cabinet ministers, says Mallard.

With the increasing allegations of cronyism directed at the Government, The Truth newspaper (under Cameron Slater’s editorship) has decided to put together an extensive list to remind us of some similar partisan appointments – see: Labour’s Crony Appointments 1999-2008. And for the latest news item on cronyism, see TVNZ’s Solid Energy accused of cronyism over contracts.

Who sits in judgment on the judges? David Fisher has the answers in Judging the judges: Scrutinising judicial conduct, but he also reports that this isn’t enough for some, and so the Sensible Sentencing Trust ‘plans an assault on the judiciary’ – see: 'Bad judges' site draws flak. Related to this, Andrea Vance reports that Judge appointments in courts shake-up.

The introduction of charter schools is no longer as straightforward, with Kate Shuttleworth reporting Dunne to oppose charter school in upcoming vote.

The latest parliamentary and ministerial travel expenditure is out – for the details, see Vernon Small’s Nearly $3000 a day for minister's travel.

Finally, twelve questions are put to Winston Peters by Sarah Stuart, with responses about his relationship with Helen Clark, reading The Little Red Hen story, the rise of conformity in Parliament, buying his suits from the Salvation Army, and what he wears when not wearing those suits (answer: ‘clothes’).